BoJ's Tamura says Japan has already met BoJ's 2% inflation goal and must increase rates close to neutral to prevent inflation from exceeding the target

Says:

• BoJ needs to gauge where the neutral rate lies by assessing how each rate hike affects the economy, prices and financial developments.
• Important for FX rates to move in a way reflecting fundamentals.
• FX rates move not just by policy stance of central banks, but by other factors.
• FX moves are important factors affecting Japan's economy and prices.
• FX moves have a bigger impact on inflation than in the past due to change in corporate price-setting behaviour.
• If risk of inflation overshoot materialises, we may need to accelerate the pace of rate hikes.
• Whether the BoJ raises rates once every three months or four months would depend on how the economy and prices and markets respond to each rate hike.