BOJ deputy governor Himino says more interest rate hikes likely

Bank of Japan Deputy Governor Ryozo Himino announced on Monday that the central bank is likely to continue raising interest rates as it gradually shifts into a more neutral stance on monetary policy. The remarks came amid growing speculation about the BOJ's future monetary policy direction. Japan's central bank has maintained ultra-loose policies for years to combat deflation and stimulate economic growth. However, with inflation persisting above the bank's 2% target, policymakers are reconsidering their approach. Himino's comments suggest a significant shift in the BOJ's traditionally dovish stance, potentially marking the end of the era of negative interest rates and yield curve control. Market analysts are closely watching the BOJ's next moves, as further rate hikes could have wide-ranging implications for Japan's economy and financial markets. Higher borrowing costs may slow economic activity but could also help normalize the yield curve and reduce distortions in the financial system. The BOJ's policy shift could also influence the yen's exchange rate, potentially strengthening it against other currencies if the rate differential with other major economies widens.