June Rate Hike Crucial for BOJ as Former Board Member Warns of Inflation Hit

The Bank of Japan is gradually normalizing monetary policy, but rising wages, a weaker yen and higher import costs continue to drive up prices. Former BOJ board member Makoto Sakurai said the temporary slowdown in Tokyo inflation was merely a technical distortion and that underlying inflationary pressures remained strong. Any delay in policy action would leave households and businesses facing higher costs.

Sakurai warned that the BOJ’s June monetary policy meeting represented a crucial window for a rate hike. If the central bank failed to act, international geopolitical uncertainty could force it to postpone the move indefinitely. He cautioned that continued yen depreciation could once again amplify imported inflation, dealing a severe price shock to Japan’s economy before monetary policy could catch up.