The Bank of Japan's Board Member, MASU Kazuyuki, delivered a speech in Fukui, discussing Japan's economic activity, prices, and monetary policy. According to MASU, recent data show a growth rate of around 3 percent, with wage increases of 5-6 percent mentioned in the annual spring labor-management wage negotiations. The underlying inflation rate is very close to the Bank's target level of 2 percent. MASU noted that the Bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation to ensure that the underlying inflation rate does not significantly exceed 2 percent. The policy interest rate currently set by the Bank is 1.0 percent, which is lower than the estimated range of the neutral interest rate of 1.1 to 2.5 percent. The Bank has made an exit from the prolonged period of unprecedented monetary easing and has implemented five policy interest rate hikes since March 2024. The Bank's annual JGB purchases will be around 24 trillion yen from fiscal 2027, down from the peak of 135 trillion yen four years ago. MASU emphasized the importance of managing the inflation rate through appropriate monetary policy to maintain real wage growth and ensure that the wage increases firms have achieved are not in vain. The Bank is closely monitoring developments in foreign exchange rates and AI-related demand as risk factors to prices. The Bank's JGB holdings are expected to decline steadily, and the Bank will examine what the appropriate way to match assets and liabilities is, considering the complexities involved.