BOJ Likely to Continue Rate Hikes: Deputy Gov.

Tokyo, March 2 (Jiji Press)--The Bank of Japan is expected to continue raising its policy rate even if the country's inflation rate temporarily falls below the central bank's 2 pct target, BOJ Deputy Governor Ryozo Himino suggested Monday.

The country's underlying inflation, excluding temporary factors, is getting closer to 2 pct, he told a press conference in the western Japan city of Wakayama. "There is a considerable possibility that a phase of reducing the degree of easing will come," he added.

On the possible impact of the U.S.-Israeli attacks on Iran, Himino said that "it's difficult to predict future developments." The BOJ will continue to monitor the situation while closely communicating with the Japanese government, he added.

Although financial markets have become unstable due to the intensifying situation in the Middle East, Himino said it does not mean that the BOJ will refrain from changing its monetary policy when there is volatility.

In a speech earlier in the day, he said that the country's inflation rate could not yet be said to have reached the BOJ's 2 pct target with certainty.

[Copyright The Jiji Press, Ltd.]