BOJ may be forced to hike rates rapidly if inflation accelerates, board member Masu says

Bank of Japan board member Kazuyuki Masu said on Thursday that the central bank may be forced to rapidly raise interest rates if inflation accelerates, citing accommodative financial conditions and rising producer prices. Masu noted that companies are increasingly passing on higher costs from factors like the Middle East conflict and the weak yen, which could push up consumer inflation more than in the past. He believes underlying inflation is nearing the BOJ's 2% target and that the policy rate should be increased further to allow for swift adjustments based on economic conditions. A Reuters poll indicated that the BOJ is expected to raise interest rates to 1.25% on September 18 and then to 1.75% in the second quarter of 2027, earlier than previously anticipated, amid persistent concerns over broadening price pressures and yen weakness.