Bank of Japan's Most Hawkish Member: Interest Rates Need to Be Raised as Soon as Possible

Hajime Takata, a member of the Bank of Japan's Policy Board, stated that deflation is now completely a thing of the past, and the path for the Bank of Japan to raise interest rates soon has become clear.

Hajime Takata said, "I believe the central bank should further shift gears and signal through its communications that the price stability target has been largely achieved."

He also warned that external shocks could lead to Japanese inflation rising above expectations.

These remarks come at a time when investors are seeking clues about the Bank of Japan's next move. Although Governor Kazuo Ueda insists the central bank has not fallen behind the curve, market anxiety is mounting.

The weakening yen, coupled with the expansionary fiscal policy introduced by Prime Minister Sanae Takaichi, has intensified market concerns about inflation accelerating too quickly and rising too high.

Hajime Takata, previously a private-sector economist, is regarded as the most prominent hawk on the Bank of Japan's Policy Board. In January this year, the central bank voted 8-1 to keep the policy rate unchanged at 0.75%, with Takata being the sole dissenting member who proposed raising the rate to 1.0%.

This member said that previous concerns about the impact of US tariffs have eased—he had considered them one of the main obstacles to the Bank of Japan's rate hike path.

He stated, "In terms of monetary policy operations, I believe the 'true dawn' is finally in sight, and on this basis, the central bank is gradually shifting gears."

Editor: He Yun