BOJ Board Member Calls for Further Rate Hikes

A Bank of Japan board member called for additional interest rate increases on Friday to complete the normalization of monetary policy and keep underlying inflation below the central bank's 2 percent target, signaling a cautious but firm shift toward tighter policy amid persistent yen weakness.

Kazuyuki Masu, a member of the bank's policy board, made the remarks during a speech to business leaders in Matsuyama, in western Japan's Ehime Prefecture. He stated that Japan's underlying inflation remains below 2 percent but is approaching that level as companies and households abandon long-held deflationary habits. "I am convinced that continuing with further policy interest rate hikes will be needed to complete the normalization of monetary policy in Japan," Masu said.

Masu emphasized the need for timely rate adjustments to prevent inflation from overshooting the target, particularly as the weak yen drives up import costs and risks amplifying price pressures. He highlighted rising processed food prices, including sharp increases in rice, as a potential factor that could make households more tolerant of broader inflation. The policymaker noted that the central bank is closely...