Bank of Japan Policy Board Member Kazuyuki Masu stated on Friday that the central bank must continue raising its benchmark interest rate to complete the normalization process of monetary policy settings.

Speaking to local business leaders in Ehime Prefecture, western Japan, Masu emphasized that such actions would help resolve the divergence between Japan's monetary policy direction and that of other nations regarding interest rate increases or decreases.

He noted that although the underlying inflation rate remains below 2%, it has come "very close" to the target. Japan has clearly entered an inflationary phase, and the key challenge moving forward is to ensure the underlying inflation rate stays below 2% through appropriate and well-timed rate hikes. At the same time, he stressed the importance of avoiding excessive interest rate increases that could disrupt the recently established virtuous cycle of moderate wage and price growth.