BoJ's Himino: Japan real interest rate still very low

Bank of Japan (BoJ) Deputy Governor Himino said on Tuesday that Japan's real interest rate is still very low, adding that it's appropriate to continue raising interest rates if the economic outlook is met. 

Key quotes

Raise rates if economic outlook is met. 

Despite three policy interest rate hikes by the bank so far, real interest rates have remained at significantly low levels as inflation has stayed.

Japan real interest rate still very low. 

Appropriate to continue raising interest rates in accordance to improvements in economy prices. 

Risks on both sides for prices, economy. 

Without any preconceptions, we will continue to monitor the economy closely tosee if the baseline scenario unfolds as expected.

Want to scrutinise without preset idea whether our baseline projections materialise. 

Must continually assess balance of risks, both upside and downside, and respond in a timely and appropriate manner. 

Our baseline scenario is for Japan corporate profits to come under pressure from global slowdown, impact of trade policy

Chance trade policy impact could be smaller or bigger than expected, must focus on possibility it could be bigger than expected. 

Market sentiment has now largely returned to state seen before volatile phase in April, close monitoring of financial markets is still warranted. 

Monetary easing, tightening should primarily be conducted by adjustment to short-term policy rate, not by adjustment of BOJ's JGB buying.

Market reaction

At the time of press, the USD/JPY pair was up 0.22% on the day at 147.50.