TOKYO (Reuters) -The Bank of Japan is “nearing” a decision to raise interest rates and will not wait until after next year’s spring wage negotiations end, its board member Kazuyuki Masu was quoted in the Nikkei newspaper as saying.
“I can’t say what month it’ll be, but in terms of distance, we’re close,” Masu said on the timing of the central bank’s next rate hike, according to the Nikkei, which interviewed him on Thursday.
The central bank must raise interest rates as it would be “not good” for inflation-adjusted, real borrowing costs to remain deeply negative, he was quoted as saying.
Japan’s policy interest rate, at 0.5%, is lower than what is considered neutral to the economy, which is another reason for hiking rates, he added.
“Looking at the economic and price situation, I do think the environment is favourable for raising interest rates. This is not monetary tightening, but simply part of the normalisation process,” Masu said, according to the Nikkei.
(Reporting by Leika Kihara; Editing by Chris Reese)
