By Megumi Fujikawa
A Bank of Japan interest-rate hike could be imminent, policy board member Kazuyuki Masu said as he expressed concern that higher oil prices will exert persistent pressure on inflation.
"If statistical data do not indicate clear signs of an economic downturn, I believe it is desirable to raise the policy rate at the earliest stage possible," Masu said Thursday at an event held by a business group in Japan's Kagoshima prefecture.
The Bank of Japan kept its policy rate at 0.75% at its meeting in late April, while raising inflation forecasts to reflect the rise in oil prices. Masu, who voted in favor of the decision to stand pat, said Thursday that he saw no need to rush to tighten policy settings at that time.
A summary of opinions from the meeting showed that the policy board has grown more concerned about the risk that the conflict in the Middle East will accelerate Japan's underlying inflation.
Many economists and investors expect the central bank to raise interest rates to 1% when it next gathers in June.
Masu, a former executive at Japanese trading company Mitsubishi, said the climb in prices of fuel and chemicals might not be temporary, and could lead to broad-based price growth in goods and services.
An oil shock now will likely have a more significant impact on consumers' everyday life than it did during the 1970s because people depend on plastic products much more than they did 50 years ago, he added.
"What is vital from now on is to ensure that, through timely and appropriate policy rate hikes, the underlying inflation rate does not exceed 2%," Masu said.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
05-14-26 0055ET
