Former Bank of Japan board member: June rate hike by the Bank of Japan is crucial, otherwise, it will lag behind inflation trends

```htmlAccording to Golden Ten Data on May 29, Makoto Sakurai, who served as a Bank of Japan policy board member from 2016 to 2021, said that the Bank of Japan is very likely to raise interest rates next month, and this meeting will determine whether policymakers can avoid falling behind the curve in dealing with inflation. On Friday, Makoto Sakurai said: “They are very likely to hike rates this time. If they don't, their policy will fall behind the curve. This meeting is extremely important.” Makoto Sakurai noted that if officials don't act this time, they may miss the window to raise rates and could be forced to indefinitely delay the next rate hike due to the persistently high uncertainty stemming from the Iran conflict. Sakurai made these remarks as the yen hovers near the levels where Japanese authorities intervened last month to support the currency, increasing the risk that rising import costs could further fuel inflation. Data released on Friday showed that the Tokyo inflation gauge tracked by the Bank of Japan rose 1.3% year-on-year in May, a slower-than-expected pace and the smallest increase in four years. This deceleration was mainly due to a temporary reduction in water fees in Tokyo. Makoto Sakurai pointed out that the Tokyo inflation data is being affected by technical factors and will not alter the Bank of Japan's policy trajectory; the core inflation rate could reaccelerate later this year. Sanae Takaichi is seen as a potential obstacle to a rate hike, as she has long supported loose monetary policy. Makoto Sakurai said that after US Treasury Secretary Janet Yellen sent broad signals of support for further rate hikes during her visit to Japan earlier this month, Sanae Takaichi may this time allow the Bank of Japan's policymakers to make their own decision.```