Bank of Japan board member Hajime Takata said the time is ripe for raising the bank’s policy interest rate, looking past political instability to reiterate his conviction after he dissented from a decision to hold policy steady last month.

“I believe that now is a prime opportunity to raise the policy interest rate,” Takata said Monday in a speech to local business leaders in Hiroshima. “The once deeply entrenched norm has waned in Japan, that the price stability target has been almost achieved.”

Takata noted in his first speech after his rate hike proposal the importance of addressing inflation levels that have exceeded the BOJ’s target for more than three years. His comments indicate his unflinching support for a higher rate even as it has become increasingly likely that Sanae Takaichi, an advocate of monetary easing, will become Japan’s next prime minister this week.

With Takaichi’s rising prospects being a driving factor, traders now see about a 24% chance for a rate hike when the bank delivers its next policy decision on Oct. 30. That’s down from around 68% at the end of last month, according to pricing in the overnight swaps market.

Takata’s remarks suggest there’s a chance of another split in the vote at the board meeting this month if Gov. Kazuo Ueda pushes to keep the policy rate unchanged at 0.5%. Takata, along with fellow board member Naoki Tamura, urged raising the policy rate by 25 basis points at the September 18 to 19 policy gathering, surprising most BOJ-watchers.

With Japan’s era of persistent deflation having run its course, Takata said authorities need to shift tack. “I have come to believe that it is vital to address the situation focusing on the level of headline inflation, which has already remained at 2% and above for the past 3½ years,” Takata said.

In his last scheduled public event ahead of the next policy decision, Gov. Ueda signaled last week that he isn’t ruling out the possibility of an October hike by saying the bank’s rate stance hasn’t changed “at all.”

Takata, a former veteran economist and bond analyst, said the lack of yen gains after the Federal Reserve lowered borrowing costs earlier this year is another factor supporting a BOJ rate hike. The yen has stayed weak, trading near a key threshold of around ¥150 per dollar.

“Although the Federal Reserve moved to cut the policy interest rate in September 2025, the yen saw no appreciation and has instead depreciated,” Takata said. “In addition, the fact that both Japanese and U.S. stock prices have been at historically high levels has engendered favorable market sentiment.”