Bank of Japan board member states that policy normalization should be achieved through timely interest rate hikes

Bank of Japan Policy Board member Kazuyuki Masu said on Friday that the Bank of Japan needs to continue raising the benchmark interest rate to complete the normalization of monetary policy. Masu made the remarks during a speech to local business leaders in Ehime Prefecture in western Japan, stating that this move will help end the divergence in monetary policy directions between Japan and other countries regarding interest rate hikes or cuts. He said that although the potential inflation rate remains below 2%, it is “very close” to the 2% target; Japan has clearly entered an inflationary phase, and the key moving forward is to ensure that the potential inflation rate stays below 2% through timely and appropriate rate hikes, while also avoiding excessive increases that could disrupt the healthy cycle of moderate wage and price growth that has just been established.