BOJ Official Calls for Timely Rate Hikes on Inflation
Julia DanielsBOJ's Masu advocates timely rate hikes to cap inflation nearing 2%, balancing policy normalization and economic growth.
Bank of Japan (BOJ) board member Kazuyuki Masu has advocated for timely interest rate hikes, warning that the central bank must act to prevent underlying inflation from surpassing its 2% target.
Speaking to business leaders in Matsuyama, Masu noted that while Japan's underlying inflation remains below 2%, it is now "drawing very close" to that level. This shift comes as both companies and households begin to move away from the nation's long-entrenched deflationary behavior.
Normalizing Policy to Contain Price Pressures
Masu expressed his conviction that continued policy rate hikes are essential to "complete the normalization of monetary policy in Japan."
As the country clearly enters an inflationary phase, he argued that the BOJ must deploy "timely and appropriate rate hikes" to ensure underlying inflation does not overshoot its target.
A Cautious Approach to Protect Economic Momentum
At the same time, Masu cautioned against moving too aggressively. He stressed that it is critical to avoid "excessive rate hikes" that could disrupt the positive cycle of rising prices and wages that has started to gain momentum.
This balancing act means the Bank of Japan will proceed cautiously with future rate adjustments to support the economy while keeping inflation under control.
