Calls for Faster Rate Hikes Voiced at BOJ July Meeting

At the Bank of Japan's July 30-31 policy-setting meeting, officials called for a faster pace of interest rate hikes due to rising inflation risks, according to minutes released on Monday. A BOJ Policy Board member stated that the risk of waiting was no longer marginal and emphasized the necessity for the central bank to accelerate the pace of adjusting monetary accommodation.

Following a decision to maintain interest rates at 0% at the July meeting, the BOJ announced at its subsequent meeting this month that it would raise its policy rate to 1.25%. This move came about three months after the previous rate hike in June, the quickest interval during Governor Kazuo Ueda's term. During the July meeting, multiple Policy Board members noted that underlying inflation, excluding temporary factors, was nearing 2% and stressed the importance of determining if it would stabilize around that level.

One member suggested that gradually moderating the degree of monetary accommodation would prevent rapid future interest rate hikes and benefit all economic entities in the long run.