Bank of Japan board member Miyako Suda said sustaining inflation is ``key'' to sustaining the economy's expansion, Bloomberg News reports.

``While the Japanese economy is in a sluggish state, containing inflation is key to sustaining economic growth,'' Suda told business executives in Kanazawa, central Japan. ``Given that global monetary conditions have been accommodative, inflation is rising around the world, and that's clearly causing inflationary expectations of people and companies to rise.''

Suda, who along with two colleagues unsuccessfully voted for an interest-rate increase in January 2007, told reporters that the central bank should raise the key rate from 0.5 % ``a little early, when there's more room to maneuver.'' The bank last week described growth as ``sluggish'' for the first time in a decade, signaling it's unlikely to tighten credit anytime soon.

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