Bank of Japan Deputy Governor Naoaki Okabe: There is a risk of inflation exceeding the 2% target.

Bank of Japan Deputy Governor Kikano Narao explained the reasons for raising interest rates earlier this week by stating that there is a risk of inflation accelerating beyond the central bank's 2% target. "We see a slight acceleration in the transmission speed of cost increases in transactions between companies, and we believe this may eventually spread to a broader range of consumer goods and services," Kikano Narao said in response to questioning in parliament on Friday. "As you pointed out, there is a risk of potential inflation accelerating beyond the central bank's 2% price stability target." This week, after the Bank of Japan raised its benchmark interest rate to the highest level in 31 years, Kikano Narao became the first central bank official to publicly discuss the matter. He reiterated the central bank's commitment to continue raising interest rates based on economic and inflation conditions, but did not give any clear hints about the potential timing for a rate hike.