BOJ Expects Slow Rate Hikes Due to Wage-Price Impact

Asahi Noguchi, a board member of the Bank of Japan, stated on Thursday in Saga, Japan, that the pace of future rate increases by the central bank is anticipated to be markedly slower compared to other global central banks. Noguchi emphasized that this decelerated approach is due to the delayed transmission of rising domestic wages to prices.

In a speech published on the BOJ’s website and delivered to business leaders, Noguchi expressed, “With regard to the pace of policy rate adjustment, it is expected to be slow, at a pace that cannot be compared to that of other major central banks in recent years.” He further elaborated that achieving a sustained inflation rate of approximately 2% would require a considerable amount of time.

Noguchi also mentioned during a press conference that he believes there is a “considerably high” chance of reaching the 2% inflation target by 2026. When asked about the timeline for attaining this goal, he optimistically stated, “I personally believe that the situation will improve substantially in a period of two years.”

Regarding any potential interest rate hikes for the year, Noguchi refrained from providing a definitive answer, citing that the decision would hinge on prevailing economic circumstances.


On March 19, 2024, the Bank of Japan raised its short-term interest rates to 0 to 0.1% from the level of -0.1% that had been kept at a negative level since 2016.

Additionally, the Japanese central bank also announced the end of its yield curve control policy for its 10-year Japanese government bonds that it introduced to target longer-term interest rates, by buying and selling bonds as it deems necessary.