BOJ Policymaker Warns of Rapid Rate Hikes Amid Inflation Concerns

Bank of Japan (BOJ) policymaker Kazuyuki Masu warned that the central bank may need to raise interest rates rapidly if inflation accelerates in Japan. This would be due to the country's loose financial conditions, with Masu stating that price risks are a concern.

Masu made his comments ahead of next week's policy meeting, saying that underlying inflation is 'very close' to the BOJ's 2% target. He also noted that the bank must pull real interest rates out of negative territory as soon as possible.

While Masu did not give explicit hints on the timing and pace of future rate hikes, he emphasized the need for caution in gauging how close the BOJ's policy rate is to neutral levels. He stated that 'underlying inflation is about to reach 2%, but we don't see it sharply overshooting that level.'

Masu's remarks add to a growing chorus of hawkish commentary from BOJ officials, with some analysts predicting a 50-basis-point rate hike next week.