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2026-02-26 15:11:17
[Bank of Japan Policy Board Member Hajime Takata: Must Pay Attention to Risk of Excessive Inflation, Calls for Gradual Interest Rate Hikes] 1. Bank of Japan policy board member Hajime Takata stated on Thursday that the central bank must pay attention to the risk of excessive inflation when formulating monetary policy and called for gradual interest rate hikes. He reiterated that Japan has achieved its 2% inflation target and the economy has fully emerged from its long-term stagnation. 2. Takata pointed out that large-scale global fiscal and monetary stimulus and the artificial intelligence market boom may boost global economic growth and exacerbate Japan's already rising inflationary pressures. He emphasized that medium- to long-term inflation expectations are rising, and rising prices are more likely to trigger a second round of effects. 3. Regarding the pace of interest rate hikes, Takata stated that it is difficult to pre-determine the ideal speed and magnitude of interest rate hikes, and a gradual interest rate hike strategy is better than adjusting interest rates based on a projected neutral interest rate level. Whether to propose further interest rate hikes in March and April will depend on the economic situation at that time. 4. Regarding the reduction of bond purchases, Takata emphasized that it must be done "gradually and prudently" to avoid triggering sharp fluctuations far exceeding market expectations. The central bank should be wary of structural changes such as weak demand for ultra-long-term treasury bonds, and be prepared to implement emergency bond-buying operations if necessary.
