Japan’s ruling party member Katsunobu Kato has expressed growing political support for additional interest rate hikes, stating that the central bank needs to closely monitor the economy and consult with the government.

Kato believes Japan is moving towards an era where prices and wages are rising, and that monetary policy will revert to the original style of moving interest rates in positive territory.

He is more concerned about the impact of the weak yen on inflation than if it was too weak.

The BOJ has indicated that additional rate increases are probable, and the recent depreciation of the yen is a reflection of fundamental changes in Japan’s economy and the country’s large interest rate disparity with other nations.