TOKYO, Sept. 10 (Xinhua) -- The Bank of Japan (BOJ) will continue to raise its key interest rate to ensure it does not fall behind the curve in fighting inflation, one of its board members said Thursday ahead of the bank's policy meeting next week.
In a speech to Japanese business leaders in Fukui Prefecture, Kazuyuki Masu, who sits on the BOJ's Monetary Policy Committee, said the central bank "will continue to raise the policy interest rate and adjust the degree of monetary accommodation in response to developments in economic activity and prices as well as financial conditions."
"What is most vital from now on is to ensure that the underlying inflation rate does not significantly exceed 2 percent," Masu said.
The BOJ is widely expected to hike its policy rate by 0.25 percentage points to 1.25 percent at its Sept. 17-18 meeting, after raising it to 1.0 percent at its June meeting, its highest level in 31 years, and leaving it unchanged at its July meeting.
Masu said the BOJ should raise the rate further to "complete the normalization of monetary policy" following decades of deflation and negative rates.
"Financial conditions in Japan remain accommodative. If inflation accelerates here, there is a risk that the BOJ might inevitably need to implement a rapid policy interest rate hike," he added. ■
