Bank of Japan board member Kazuyuki Masu said Japan is no longer in deflation and that the central bank should eliminate negative real interest rates quickly, reinforcing expectations for further policy tightening. He said the BOJ may need to accelerate rate increases if underlying inflation rises materially above its 2% target. Markets are betting on a 25-basis-point increase from 1.0% to 1.25% at the September 17-18 meeting, with some investors expecting a signal of another move in October. The yen has strengthened to around 153.5 per dollar from nearly 164 in July, while the 10-year Japanese government bond yield has risen above 3% for the first time in about 30 years as investors reassess the effects of monetary-policy normalization.