TOKYO: The Bank of Japan must raise interest rates at a "very moderate" pace and avoid hiking prematurely, its policymaker Seiji Adachi said on Wednesday (Oct 16), warning that further yen rises and slowing global demand may weigh on inflation and wage growth.
But he warned of various economic uncertainties that required taking a cautious approach in raising interest rates.
The BOJ will eventually raise its policy rate to a level that neither cools nor overheats the economy, which is called the natural rate of interest.
Many analysts see the natural rate of interest as lying somewhere around 1 per cent.
Even so, our current, real policy rate is sufficiently below the natural rate of interest," Adachi said.

Bank of Japan policymaker calls for 'very moderate' pace of rate hikes