The Bank of Japan may hike interest rates faster than many currently anticipate and it should strive to better telegraph those moves to ensure markets don’t panic, according to a former official.
"Rate hikes could be faster than everyone expects," said Tsutomu Watanabe, the former official and an economics professor at the University of Tokyo. "Two more moves this year are possible," he said.
A disconnect between the BOJ’s rationale for its July 31 hike and price trends at the time indicates authorities are intent on lifting rates in order to create a policy buffer against potential downturns and normalize settings as soon as possible, said Watanabe, who is one of Japan’s top inflation experts.
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