Bank of Japan Policy Board member Masu Kazuyuki (増一行) said in a speech in Fukui City that further rate hikes are necessary to complete monetary normalization. He said underlying inflation is below 2% but has come quite close to that level.
In a speech in Fukui City, Bank of Japan Policy Board member Masu Kazuyuki (増一行) said that “further rate hikes” are needed to advance monetary normalization.
He explained that underlying inflation is below 2% but, in substance, has come quite close to that level, indicating that conditions are nearing the realization of the target.
The speaker pointed out that Japan’s financial conditions remain accommodative and explained that, if inflation accelerates, there is a risk of being forced to raise interest rates rapidly. He emphasized that negative real interest rates should be eliminated as soon as possible.
Regarding the impact of yen depreciation, he said its effect on prices has grown larger than before and that developments should be monitored closely going forward.