The Bank of Japan headquarters in Tokyo. [Getty Images]
The Bank of Japan headquarters in Tokyo. [Getty Images]

The Bank of Japan has signaled it will continue raising its policy interest rate.

Deputy Governor Himino Ryozo said Thursday at a financial and economic briefing in Saitama that the central bank intends to keep lifting its policy rate, according to Kyodo News.

"Current monetary conditions remain accommodative," Himino said in his remarks. "We will continue raising the policy interest rate to adjust the degree of monetary easing." He also stressed that the bank needs to be more mindful than before of the risk that prices could rise beyond expectations.

He added that heading off a scenario in which delayed rate hikes allow inflation to worsen — forcing a sharp, rapid tightening — would ultimately be in the best interests of small and medium-sized enterprises, housing loan borrowers and fiscal stability.

The Bank of Japan is scheduled to hold its monetary policy meeting Sept. 17-18. Think tank Todan Research said Wednesday that the probability of a rate hike being decided at that meeting stood at 87 percent. Market sentiment more broadly also favored a rate increase, and Himino's remarks Thursday served to reinforce that outlook.

At its June meeting, the Bank of Japan raised its policy rate to 1.0 percent, the highest level in 31 years. If an additional hike is approved at next month's meeting, it would mark the fastest pace of rate increases in the central bank's history.


kate01@heraldcorp.com