BOJ Warns Quick Rate Hikes May Be Needed Amid Rising Inflation

Bank of Japan (BOJ) board member Kazuyuki Masu warned that the country's financial conditions remain accommodative, which may necessitate a quick increase in interest rates if inflation speeds up. In a recent address, Masu pointed out that Japanese producer prices have risen sharply this year due to surging oil prices, leading to higher business costs.

While government subsidies have shielded consumer inflation from direct effects of higher fuel prices, businesses are expected to pass on the increased costs to consumers. Masu noted that underlying inflation has not yet reached but is close to the BOJ's 2% target.