Bank of Japan debated need for faster rate hikes, July minutes show
In a recent meeting, many Bank of Japan policymakers emphasized the need to address mounting inflation risks, suggesting faster interest rate increases, according to minutes from their July gathering. Following a rate hike in June, the central bank paused in July before raising its policy rate to a 31-year high of 1.25% in September. This surge in borrowing costs came as the Middle East war and a weak yen increased the price of fuel and raw materials.
Given the growing inflation concerns, the nine-member board appeared to be moving its policy focus toward anchoring underlying inflation around the 2% target, rather than merely driving up prices. One member suggested that the BOJ should raise interest rates at a faster pace, as the risk of waiting had become less marginal. Another member stressed the importance of swiftly adjusting the policy rate to counter upside price risks.
The BOJ had kept interest rates steady at 1% during their July 30-31 policy meeting, but they warned that underlying inflation could surpass its target. They stated that future policy discussions would concentrate on addressing these upward price risks.
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- Bank of Japan debated need for faster rate hikes, July minutes show channelnewsasia.com
