BOJ Debates Faster Rate Hikes Amid Inflation Risks
The Bank of Japan (BOJ) policymakers have been debating a faster rate hike pace since their July meeting, according to a summary of opinions released on Monday. The hawkish tone from the BOJ board members is in line with Governor Kazuo Ueda's signals after the July meeting.
The BOJ's Summary of Opinions shows that many board members are warning of mounting inflation overshoot risk that could require a faster than expected pace of rate hikes. They cited weak yen import costs, strong AI-related demand, and high fuel costs from the Middle East conflict as combined drivers of inflation risk.
One member said the pace of hikes could be faster than markets expect given the need for greater vigilance on overshoot risk. Another member called for accelerating the pace of policy adjustment, saying that the risk of waiting is no longer marginal.