Rate Hike For Bank of Japan?
Hitoshi Suzuki (Bank of Japan board member) claimed that in order to achieve the price stability, BoJ should stick to its massive monetary easing program. The board member is also concerned about the impact of recent decline in shares. He said that it might interfere with Japan’s economic recovery and prevent the stimulus program exit. He added: "We must closely watch how moves by U.S. and European central banks toward policy normalization affect U.S. long-term interest rates and emerging market flows".
At the same time, Suzuki also expressed his worries about growing cost of the stimulus, which threatens financial institutions' profits. As we may recall, the YCC (yield curve control), which reins short-term rates at -0.1% and 10-year bond yields near 0%, have been doubled. That, in turn, caused resentment among financial institutions for reducing their inflows. Thus, the door for a rate hike is open, Suzuki notes.