Bank of Japan's Tamura Naoki, Member of the Policy Board said he believes that, by the second half of fiscal 2025 -- when wage hikes resulting from annual wage negotiations, including among small and medium-sized firms, will likely be confirmed -- Japan's economy will reach a point where it can be judged that the price stability target has been achieved. If the economy does reach this point, it will be necessary for the Bank to raise the short-term policy interest rate to a level that is neutral to economic activity and prices -- i.e., the nominal neutral interest rate -- within a similar timeframe, he said. With upside risks to prices growing, if the short-term interest rate stays below the level of the neutral interest rate, this will further push up inflation, Tamura added. Therefore, it is necessary for the Bank to raise the short-term interest rate to at least that level by the second half of fiscal 2025 to contain the upside risks to prices and achieve the price stability target in a sustainable and stable manner. The Japanese yen rebounded post Tamura's comments but gradually trimmed gains. USD/JPY pair rebound to 152.43 after having dropped below 152 mark,its lowest level since December 12 touched during the Asian session on Thursday.

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