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By Megumi Fujikawa

  Bank of Japan policy board member Junko Nakagawa reaffirmed the bank's stance of seeking further interest-rate hikes but also stressed the necessity of moving carefully given lingering uncertainties. 

  "If its outlook for economic activity and prices is realized, the bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation," Nakagawa said in a speech Monday. 

  She said medium- to long-term inflation expectations are moderately rising toward the bank's target of 2%. "The rise in such expectations over the past few years has been more pronounced than in the past," she said. 

  The former Nomura executive also acknowledged a high degree of uncertainty over the economic outlook, including around the impact of higher U.S. tariffs. 

  She then warned of the possibility that a negative shift in expectations for artificial intelligence, which has been fueling a rise in global stock markets, could significantly affect asset prices and slow the U.S. economy. 

  "The bank will make monetary policy decisions as appropriate by continuing to carefully assess data and information that becomes available," she said. 

  At its latest meeting in October, the Japanese central bank held its policy rate steady at 0.5%, keeping it at the same level since its last hike in January. A summary of opinions from that meeting released Monday suggested that the BOJ policy board is getting ready for the next interest-rate hike. 

  "It is likely that conditions for taking a further step toward the normalization of the policy interest rate have almost been met," one policy board member was quoted as saying. 

  Write to Megumi Fujikawa at megumi.fujikawa@wsj.com 

  (END) Dow Jones Newswires

  November 09, 2025 23:54 ET (04:54 GMT)
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