BOJ Deputy Governor Warns of Inflation Risks, Hints at Rate Hike

Bank of Japan Deputy Governor Ryozo Himino emphasized the need for timely interest rate hikes to combat mounting inflation risks. Speaking at a business leaders' event in Urawa, Japan on August 27, Himino highlighted that elevated fuel costs and rising chip prices are pushing up inflation. A weak yen could also accelerate price growth, he warned.

Himino stressed that the BOJ should pay greater attention to upside risks to prices than in the past. He noted that underlying inflation is approaching 2% and urged the central bank to stabilize price growth around this level.

The BOJ has been under market pressure to raise interest rates, with some predicting a September hike. Himino did not rule out this possibility but stopped short of giving explicit signals on timing. Instead, he emphasized the need for 'in-depth deliberations' at each policy meeting.