Bank of Japan Official Anticipates Another Interest Rate Hike Amid High Inflation

Kazuhito Masu, a member of the Monetary Policy Council at the Bank of Japan, has hinted that another interest rate hike is likely in the near future. Speaking just over a week before the next meeting of the council, Masu emphasized the need to continue tightening monetary policy despite inflation remaining high.

According to Masu, core inflation records are 'very close' to the 2% target, which he believes reinforces the case for further interest rate increases. The official also pointed out that Japan is at risk of being forced to raise rates quickly if inflation accelerates, echoing recent global trends in response to the situation in Iran.

The Bank of Japan last raised its benchmark interest rate by 25 basis points to 1% in June, but opted not to increase it further in July. However, with inflation currently standing at 1.9%, just shy of surpassing the 2% threshold, a new rate hike is now increasingly likely.