Asada emphasized that both past and potential future rate increases risk burdening economic activity when consumption and overall growth continue to lack momentum. Although he acknowledged that inflation overshooting the 2 percent target poses economic dangers, he maintained that rapid tightening must be avoided. Asada has a track record of pushback, having previously dissented against the central bank's rate increases in June and September. Consequently, he called on the central bank to carefully evaluate the pace of any upcoming adjustments to the policy rate.
Key points
Premature interest rate hikes could damage economic growth and suppress underlying inflat…: Premature interest rate hikes could damage economic growth and suppress underlying inflation in Japan.
Current price increases have not necessarily been driven by strong domestic consumer dema…: Current price increases have not necessarily been driven by strong domestic consumer demand.
The Bank of Japan must give careful consideration to the pace of future policy rate adjus…: The Bank of Japan must give careful consideration to the pace of future policy rate adjustments.
Sources checked by our analysis pipeline: 1
NAGASAKI, Japan, Nov 12 : Dovish Bank of Japan policymaker Toichiro Asada pushed back against calls within the board for a near-term interest rate hike, arguing on Thursday that premature rate hikes could hurt growth and push down underlying inflation.
While an overshoot of inflation above the BOJ's 2 per cent target could have adverse effects on the economy, there was also a risk the effect of past and future rate hikes may weigh on economic activity and underlying inflation, Asada said in a speech to business leaders in Nagasaki, southern Japan.
Welcoming data showing real wages turned positive since the turn of 2026, Asada said growth and consumption have lacked momentum.
"I believe the recent price increases have not necessarily been driven by demand factors," said Asada, who dissented on the BOJ's decisions to raise interest rates in June and September.
"In this sense, I consider it necessary for the Bank to give due consideration to the pace of any policy rate hikes," he said, stressing the need to avoid cooling growth with too-fast rate hikes.
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