Japan's BoJ board member Asada says demand‑driven inflation needed before more rate hikes

Bank of Japan board member Toichiro Asada told Reuters that he will back another interest‑rate increase only when inflation is clearly driven by stronger domestic demand rather than temporary cost pressures such as higher oil prices or a weaker yen. As the sole dissenter to the BOJ’s June decision to raise the policy rate to 1 % – a 31‑year high – he cited lingering uncertainty over external developments and the need for rising wages and consumer spending to sustain price gains. Asada noted a relatively rapid pass‑through of higher oil costs but said this alone should not justify tightening. He stressed that future policy must remain flexible, coordinated with fiscal measures, and anchored to the 2 % inflation target, while acknowledging that Japan’s neutral rate remains low. Analysts expect a possible follow‑up hike between October and December, but the board’s split underscores ongoing debate over the timing of further normalization.