During a speech in Kyoto, Takada, a member of the Bank of Japan's Policy Board, highlighted the importance of implementing additional interest rate hikes, citing the risk of the central bank falling 'behind the curve' as global economic recovery accelerates and interest rates rise worldwide. Takada mentioned that the target inflation rate of 2% has 'generally been achieved', which he believes supports the case for increasing rates further.

As a former economist, Takada is known for his hawkish stance on monetary policy and had previously proposed raising the policy interest rate to 1.0% during a decision meeting in January, though this proposal was rejected in an 8-to-1 vote. His recent comments not only addressed the need for proactive measures in Japan's monetary policy but also reassured that concerns over slipping back into deflation have been alleviated, acknowledging limited effects from U.S. tariff policies on Japan's economy.

The implications of Takada's assertions indicate a potential shift in the Bank of Japan's approach to monetary policy as global inflationary pressures build. He warned that if inflationary factors arise predominantly outside Japan, there may be unexpected upward pressure on prices in the domestic market, underscoring the central bank's need to remain vigilant and responsive in its monetary policy decisions going forward.