Bank of Japan official: Needs to see demand-driven inflation before supporting rate hike

Jin10 Data July 8 - Bank of Japan board member Toichiro Asada said he needs to see signs of demand-driven inflation before supporting a rate hike, but also noted that cost-push transmission is "relatively fast," suggesting he may vote for a rate hike in the future.
Asada made the remarks in his first interview since joining the policy board. He is a board member appointed by dovish Prime Minister Sanae Takaichi.
The Bank of Japan raised interest rates to 1%, a 31-year high, in June, and Toichiro Asada was the sole dissenter to this decision.
He said he voted against it because of ongoing uncertainties in the Middle East, which could impact output and employment.
The key prerequisite for supporting future rate hikes is that Japan has conditions to sustainably achieve its 2% inflation target.
"Furthermore, I believe it is necessary to confirm that this target is achieved under the support of endogenous economic forces such as wage increases and demand expansion," he added, saying these forces are currently not enough to justify a rate hike.
But Asada said future decisions will depend on economic conditions at the time.
Although oil prices are falling and consumer inflation is moderating, the impact of previous oil price increases is being transmitted at a "relatively fast pace" and could lead to widespread price increases across various goods.
(Source: Jin10 Data App)