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Last Updated: Wednesday, 13 September 2006, 10:38 GMT 11:38 UK
Japan may raise rates by year end
Person cycling past stocks display board in Tokyo
The claims come despite signs Japanese growth may be slowing
The Bank of Japan could raise interest rates before the end of the year, minutes from its latest meeting show.

But members of the rate setting board agreed any adjustment in rate levels should be made "gradually".

Earlier this month, the board members voted to keep rates at 0.25% for a second month, after ending its five-year policy of zero rates in July.

Further reports, citing board member Atsushi Mizuno, hinted the bank would raise rates before the end of the year.

Expansion

"Things are in line with our scenario" that prices are rising and the economy is expanding, Mr Mizuno said in an interview with Bloomberg.

"I want to emphasize that that means fine adjustments will continue to be made to interest rates," he added.

His comments came as minutes of the meeting showed that the bank had noted that the public was "focusing on whether the bank would raise" rates this year.

Many analysts expect another increase this year, despite recent signs that economic growth has slowed and inflation increased recently.

Consumer price figures for August were revised downwards significantly, while the economy grew at a much slower than expected annualised rate of 0.8% between April and June.


SEE ALSO
Japan pegs interest rate at 0.25%
11 Aug 06 |  Business
Japan sees end to deflation curse
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Japan's economic recovery slows
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Better times for Japanese economy
29 Nov 05 |  Business
Japanese deflation appears to end
25 Nov 05 |  Business
Japan's foreign investments grow
14 Nov 05 |  Business

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