BoJ's Masu says the central bank is closely watching FX market moves and their impact on the economy and prices, also noted that appropriate and timely rate hike is needed

• BoJ will raise rates if the economy and prices are in line with the BoJ's outlook.
• Cause of inflation also warrants close attention, in terms of whether inflation is truly caused by supply-side factors alone or by a combination of both demand- and supply-side factors.
• Real interest rate remains at a significantly negative level in Japan.
• Convinced that continuing with further policy interest rate hikes will be needed to complete the normalisation of monetary policy in Japan.

The BoJ's Masu indicates a vigilant stance towards FX movements and their implications for Japan's economy and inflation, suggesting a potential shift towards normalization of monetary policy with appropriate rate hikes. His emphasis on the necessity of addressing both demand and supply-side influences on inflation signals a more complex inflation outlook, which could impact market expectations for future monetary policy adjustments. Overall, this could suggest a hawkish tilt if inflation pressures evolve as anticipated.