BOJ Member Seeks Further Rate Hikes for Policy Normalization

Kazuyuki Masu, a member of the Bank of Japan's Policy Board, spoke at an event in Fukui on Thursday. He stated that raising interest rates further is necessary for policy normalization.

Masu said underlying inflation, excluding temporary factors, remains below 2% but is 'very close' to the BOJ's 2% target. Financial conditions in Japan remain accommodative, and he warned that if inflation accelerates, the central bank could be forced to implement a rapid policy interest rate hike.

Masu also emphasized the need to address negative real interest rates adjusted for inflation 'as soon as possible.' The impact of the yen's depreciation on prices is becoming more pronounced than in the past and warrants close attention, he said.