Bank of Japan board member Naoki Tamura said interest rates should rise to at least 1% by late fiscal 2025 to manage inflation risks, reinforcing expectations of further tightening.

He said steady wage growth, labor shortages, and shifting corporate pricing behavior suggest the economy is approaching a point where rates need adjustment. While supporting a near-term hike to 0.75%, he emphasized a gradual approach to avoid economic disruption.

Tamura said keeping rates below neutral would fuel inflation.