BOJ Policymaker Warns of Rapid Rate Hikes Due to Price Risks
BOJ policymaker Kazuyuki Masu warned of potential price risks that may force the Bank of Japan to raise interest rates rapidly. In a speech ahead of next week's policy meeting, Masu stated that if inflation accelerates in Japan, given its loose financial conditions, there is a risk that the BOJ might need to hike rates quickly.
Masu noted that underlying inflation is approaching 2%, but he emphasized the importance of stabilizing it around this target. He also said that recent data does not show signs of a big, rapid overshoot in inflation, suggesting that the BOJ sees little need for a bigger-than-expected rate hike next week.
The BOJ's policy rate remains below the estimated neutral range, and Masu stated that it is unnatural for this to continue. He expressed his hope to debate thoroughly with other board members about how factors like the yen's recent rise on import costs, a renewed rise in crude oil prices, and steady increases in global food prices could affect Japan's inflation outlook.