BoJ's Masu: Interest Rates to Rise Despite Accommodative Conditions

Bank of Japan policy board member Kazuyuki Masu indicated that interest rates will likely continue to rise due to current accommodative financial conditions. However, the pace and timing of rate hikes will be determined by the likelihood of achieving baseline projections while also considering risks related to oil price movements, AI demand, and foreign exchange fluctuations.

Masu noted that underlying inflation remains below 2% but is getting close to this level. The central bank aims to avoid underlying inflation from overshooting sharply beyond 2%, which could have broader implications for prices via distribution costs.