BOJ Deputy Calls for Timely Rate Hikes Amid Inflation Risks

Bank of Japan Deputy Governor Ryozo Himino emphasized the need for timely interest rate hikes to address inflation risks. In an interview, he stated that the BOJ must balance gaining information and acting promptly to avoid being behind the curve on inflation.

Himino highlighted mounting inflationary pressures caused by rising fuel costs from the Middle East war, robust global AI demand, and high import prices due to a weak yen. He also noted that Japan has entered a phase where the BOJ must consider the possibility of underlying inflation exceeding its 2% target.

While Himino didn't explicitly confirm a September rate hike, he acknowledged that raising rates in a timely manner will help avoid a spike in inflation and abrupt rate hikes in the future. He also stressed that adjusting still-loose financial conditions would help distribute assets more efficiently to investment with growth potential.