Kazuyuki Masu, a member of the Bank of Japan's policy board, emphasized the necessity of further increasing the benchmark interest rate to complete the policy normalization process. According to Jin10, this signal may intensify market speculation about an early rate hike. Masu expressed his conviction during a speech to local business leaders in Ehime Prefecture, Japan, stating, "I firmly believe that to complete the normalization of Japan's monetary policy, it is necessary to continue raising policy rates." He noted that increasing rates would help resolve the divergence between Japan and other countries regarding interest rate directions.
Although Masu did not elaborate, the interest rate gap between Japan and other major economies is considered a primary reason for the yen's prolonged weakness. The depreciation of the yen has increased import costs, burdening businesses and households. Masu's remarks further reinforced the hawkish signals released by the Bank of Japan since its January policy meeting, boosting expectations of a possible rate hike before April. Following the BOJ's rate increase in December, most economists initially predicted the next action would occur in June or July. This speech marked Masu's first public address since joining the nine-member policy board in July last year.
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