Bank of Japan policy board member Ayano Sato expressed support for gradual interest rate hikes, despite her opposition to a rate increase in September. In an interview with Kyodo News on October 5, 2026, Sato emphasized the importance of considering trends in private consumption and income before raising rates further. She acknowledged concerns about weakening consumer spending but did not specify when the next rate hike might occur.
Sato, who joined the BOJ board in June, stressed that higher interest rates could contribute to sustainable economic growth. The central bank recently raised its key rate to 1.25 percent, the highest level in 31 years, with indications of more hikes to come. Sato and Toichiro Asada were the only board members to vote against the September rate hike, fueling expectations that further increases might be delayed.
The BOJ's cautious approach has sparked yen selling against the U.S. dollar as investors anticipated a widening gap in interest rates. Sato, appointed by Prime Minister Sanae Takaichi, highlighted the need for independent policy decisions while aligning with the government's expansionary fiscal stance. She also pointed to risks such as Middle East instability and higher crude oil prices, which could impact inflation and economic growth.