Bank of Japan board member Toichiro Asada said further interest rate hikes should be carefully timed, warning that monetary tightening is having a growing impact on economic activity as policy rates move closer to neutral. He noted in a speech that private consumption remains subdued and recent price increases have not necessarily been driven by strong demand, raising the risk that additional tightening could weaken economic activity and push down underlying inflation. Although real wages have remained positive since early 2026, supported by three consecutive years of solid base-pay increases and higher bonuses, Asada stressed the need to assess actual consumer price developments before determining whether underlying inflation can sustainably exceed the 2% target. He added that further tightening would be more justified once wage growth translates into stronger demand-driven inflation.