Bank of Japan reviewer Junichiro Asada stated that it is necessary to see signs of demand driving up inflation in order to support interest rate hikes, and pointed out that the transmission speed of cost increases is relatively fast. When the Bank of Japan raised interest rates to 1% in June, Junichiro Asada cast the only dissenting vote due to uncertainty in the Middle East situation. The premise for supporting future interest rate hikes is that Japan has the conditions to sustainably achieve its 2% inflation target, which is supported by endogenous economic forces such as wage increases and demand expansion. Junichiro Asada believes that these forces are not sufficient to justify a rate hike at present, and future decisions depend on the economic situation at that time.
