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BOJ Rate Hikes Should Proceed Gradually: IMF Official

BOJ Rate Hikes Should Proceed Gradually: IMF Official

   Washington, Oct. 24 (Jiji Press)--Additional interest rate hikes by the Bank of Japan "should proceed at a gradual pace," given balanced risks of inflation in the country, Krishna Srinivasan, director of the Asia and Pacific Department at the International Monetary Fund, said Thursday.
   Welcoming the Japanese central bank's decision in July to increase its policy rate to 0.25 pct from the previous range of around zero to 0.1 pct, Srinivasan told a press conference that the move "will help anchor inflation and inflation expectations at around the (BOJ's) 2 pct target."
   In its latest World Economic Outlook report, the IMF expects the BOJ's policy rate to reach 1.5 pct in 2027.
   "From a very global perspective, an increase in interest rates in Japan could have output spillovers to other sovereign debt markets where Japanese investors hold large positions," Srinivasan said. "But that said, so far we've seen these growth spillovers to be pretty muted because the BOJ decisions have been well communicated and they've been very gradual."
   Furthermore, Srinivasan said that the BOJ's interest rate hikes are in line with improving prospects in Japan. "When Japan's economy grows, it's good for both the region and for the global economy," he added.

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AFP-JIJI PRESS NEWS JOURNAL


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