Bank of Japan board member Hajime Takata said on Thursday the central bank should resume interest rate hikes following a temporary pause to evaluate the impact of U.S. tariffs on Japan's economy.
"My view is that the BOJ is currently only pausing its policy interest rate hike cycle, and should continue to make a gear shift (from ultra-loose monetary policy) after a certain period of "wait and see", Takata said in a speech.
Japan was close to achieving the BOJ's 2% inflation target with robust corporate profits and labour shortages driving up wages and heightening domestic price pressures, Takata said.
While projecting that such assessment will remain "broadly" unchanged despite U.S. President Donald Trump's April 1 announcement of sweeping reciprocal tariffs, Takata said he wanted to scrutinise whether U.S. tariffs would not derail the economy's momentum towards achieving the BOJ's price target.
"Given uncertainties regarding various U.S. policies remain high, the BOJ must conduct monetary policy in a more flexible manner without being too pessimistic," he said.
