BOJ flags upside price risks and possible faster interest rate hikes
At its meeting last month, the Japanese central bank held its policy rate at 1% and signalled that it could possibly raise...
The Bank of Japan (BOJ) expressed concerns about the potential for rising inflation and a faster pace of interest rate hikes during its July meeting, according to a summary released on Monday. One board member suggested that the BOJ should consider accelerating policy rate hikes due to increasing risks of prices accelerating beyond 2% Consumer Price Index (CPI) inflation.
The BOJ maintained its policy rate at 1% during the meeting and signaled a possible rate hike in September. The relatively hawkish comments from the meeting indicate growing momentum toward a near-term rate hike. The yen weakened to a 40-year low against the US dollar, which has raised concerns about import-driven inflation and global financial market stability.
Despite the BOJ's stand-pat decision in July, some members pushed for larger rate hikes, while others emphasized the need for a nimble approach to respond to factors such as overseas financial conditions.
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