On February 2, Bank of Japan Deputy Governor Norihisa Himino delivered a speech in Wakayama City discussing the impacts of the recent interest rate hike implemented in December, which marked the first increase in nearly a year. Himino indicated that the economic impacts of this rate hike so far have been 'limited' and emphasized the bank's approach of gradually increasing the policy interest rate based on ongoing assessments of economic and price conditions. However, he did not provide a timeline for when the next interest rate hike might occur.

In the context of escalating tensions in the Middle East due to recent military actions involving the United States and Israel against Iran, Himino reassured that the Bank of Japan is maintaining close exchanges of information with the government and is closely monitoring the situation. When pressed on how these developments might impact inflation and future rate hikes, he specified that there are many uncertainties ahead and refrained from making definitive statements based on specific scenarios.

The Bank of Japan had raised the policy interest rate in December to around 0.75%, the highest level in over thirty years, after keeping rates low for an extended period. While Himino suggested that further rate increases are planned, he acknowledged that the bank opted to maintain the current rate during the January monetary policy meeting to better assess the impacts of the previous hike. This cautious approach reflects a balancing act between stimulating economic growth and managing inflation concerns in a dynamic global context.