BOJ Board Member Kazuyuki Masu: Japan's Inflation Target at Risk

Bank of Japan board member Kazuyuki Masu says the case for raising interest rates is getting stronger, not weaker. He believes underlying inflation remains below 2% but is getting close to this target.

Masu, a former chief financial officer at Mitsubishi Corp, joined the BOJ board in July 2025 and is generally regarded as one of the more hawkish members of the current board.

He says the pace and timing of further rate increases will depend on achieving the BOJ's baseline inflation projections, alongside risks tied to oil prices, AI related demand and currency fluctuations. Masu wants to avoid a sharp overshoot of underlying inflation above 2%.

The recent 7% spike in producer prices is causing concern, as it could feed through to consumer inflation more than historically. Masu also expects food prices to reaccelerate, which he describes as potentially key to the long-term inflation outlook.