BOJ policy board member Asada said he must see signs that demand is driving
inflation before he would support further rate hikes, though he noted cost
pass-through is occurring "relatively quickly," implying he could back hikes in
future. Asada, the lone dissenter on the BOJ's June move to lift rates to 1% (a
31-year high), said he opposed that decision because Middle East uncertainty
could weigh on output and employment. He said any future tightening requires
inflation sustainably near 2% underpinned by wage growth and demand, conditions
he judged not yet met. While oil prices have fallen and consumer inflation is
easing, Asada warned earlier oil-driven price increases are transmitting
relatively fast and could push broad goods prices higher.
