BOJ Dovish Policymaker Backs Future Rate Hikes

The Bank of Japan's newest policymaker, Ayano Sato, has signaled her support for future interest rate hikes, despite her recent dissent on the September rate increase. In an interview with Kyodo News, Sato acknowledged the need to address inflation risks, even though she voted against the last hike due to weak consumption and underlying inflation.

Sato, appointed by Prime Minister Sanae Takaichi, who prefers looser monetary policy, joined the BOJ's nine-member board in June. Her comments highlight a growing awareness among dovish board members about the necessity of tightening policy to combat inflation.

Separately, Japan's real wages rose for the eighth consecutive month in August, supporting the case for further rate increases. Inflation-adjusted pay increased 1.5% year-over-year, though this was slower than the revised 2% gain in July.

Meanwhile, the Federal Reserve's upcoming meeting minutes could provide crucial insights into its recent rate hike decision, with markets watching for clues on future policy directions. Several major central banks have recently resumed rate hikes, reversing an earlier easing phase amid persistent core inflation above target levels.