BOJ's Masu Signals Further Rate Hikes to Tame Inflation

Bank of Japan board member Kazuyuki Masu says underlying inflation remains below 2% but is getting close, and that the BOJ is expected to continue raising rates given still accommodative financial conditions.

Masu, a former chief financial officer at Mitsubishi Corp, is generally regarded as one of the more hawkish members of the current board. He voted to keep rates unchanged at the BOJ's April meeting, but said in May he believed rates should rise as soon as possible provided there were no clear signs of an economic slowdown.

The pace and timing of further rate increases will depend on the likelihood of achieving the BOJ's baseline inflation projections, alongside risks tied to oil prices, AI related demand and currency fluctuations. Masu said avoiding a sharp overshoot of underlying inflation above 2% is the most important consideration.