BOJ Hawk Kazuyuki Masu Calls for Quick Rate Hikes

BOJ policy board member Kazuyuki Masu has made some bold statements about Japan's economic recovery and monetary policy. According to reports, Masu believes that Japan is no longer in a state of deflation and that negative real interest rates should be eliminated as quickly as possible.

Masu estimates the BOJ's neutral rate range at 1.1% to 2.5%, and thinks raising the policy rate into this range is necessary for monetary policy normalization. This would mean increasing the benchmark rate from its current level of 1.0% to around 1.25%.

Markets are currently betting on a 25 basis point hike at the BOJ's September meeting, with some also expecting another increase in October. Stefan Angrick, Moody's head of Asia-Pacific economics, has commented that Masu's remarks were a 'hawkish signal' pointing to further rate increases.

Masu's views have sparked interest among economists and investors, who are now speculating about the timing and pace of future BOJ rate hikes. While some think the central bank could eventually shorten its hiking cycle to once every three months, others remain cautious about the impact of rising rates on Japan's economy.