BoJ board member Asahi Noguchi, long seen as one of the most dovish voices on the Board, struck a notably hawkish tone today. He argued that Japan is making steady progress toward its 2% inflation goal, citing stronger wage momentum and greater corporate willingness to pass on rising costs.
Noguchi said the “need to adjust the policy interest rate is increasing more than ever,” highlighting that upside risks to prices and growth now outweigh the downside. He noted the labor market is “close to full employment” and the output gap has “almost reached zero”, warranting a shift in policy perspective to address rising inflation risks.
His comments mark a significant departure from his usual stance, adding to expectations that the BoJ could deliver another rate hike in the near future. Noguchi did caution that U.S. tariffs remain a source of downside risk, but the overall message suggests growing consensus within the Board for normalization.
