Hajime Takata advocates for interest rate increase as Japan’s pricing standards shift
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Hajime Takata, a member of the Bank of Japan’s board known for taking a more aggressive approach, urged that now is the ideal time to increase the bank’s policy interest rate. This marks a shift in stance after he opposed September’s decision to maintain the policy unchanged despite ongoing political instability. While administering a speech to local business executives in Hiroshima, southwestern Japan, Takata stated that now is an excellent chance to raise the policy interest rate. Based on his explanation, the country’s old norm about keeping prices stable has weakened. Additionally, the BOJ is close to achieving its price stability target. Takata’s shift in stance surprises several observers of the Bank of Japan During his first speech, after shifting his stance towards supporting a rate hike, Takata called on the need to address inflation levels that have surpassed the BOJ’s target for over three years. This statement shows Takata’s strong support for raising interest rates even as there is an increased likelihood that Sanae Takaichi, a supporter of more relaxed monetary policies, will become Japan’s next prime minister this week, said sources familiar with the situation. Meanwhile, as Takaichi’s odds increase, traders have weighed in about a 24% chance of a rate hike following the bank’s upcoming policy announcement on October 30. According to data from the overnight swaps market, this percentage dropped from roughly 68% at the end of last month. Takata’s remarks have also raised concerns among analysts, as they believe that this shows the likelihood of another split vote during the board meeting set to take place this month. However, this will only happen if Governor Kazuo Ueda advocates maintaining the policy rate steady at 0.5%. Notably, this is not the first time Takata has surprised observers of the Bank of Japan. In a meeting on…
Filed under: News - @ October 20, 2025 1:29 pm