BoJ Deputy Governor Ryozo Himino reinforced the central bank’s hawkish stance on Monday, warning that delaying policy normalization could allow inflation risks to intensify. Speaking in parliament, Himino said that “delaying the necessary adjustment in the degree of monetary accommodation” could allow underlying inflation to rise above the Bank’s 2% target, which “could weigh on economic activity later on.” His comments suggest policymakers are concerned about the costs of acting too late rather than tightening too soon.
The remarks come just days after the BoJ raised interest rates to 1.00% and revised up its inflation assessment. Policymakers now expect elevated energy prices linked to the Middle East conflict to exert significant upward pressure on consumer prices. That outlook has led many economists to anticipate another rate increase before the end of the year, with September emerging as a plausible timing for the next move.
Political resistance to tighter policy also appears limited. Prime Minister Sanae Takaichi reiterated that the government expects the BoJ to “conduct appropriate monetary policy” while working closely with authorities to achieve the 2% inflation target in a sustainable manner. The comments were interpreted as an endorsement of last week’s rate hike. Adding to the hawkish narrative, former BoJ board member Makoto Sakurai said on Friday that the central bank could raise rates twice more by the end of the current fiscal year as inflation risks continue to build.
