BOJ Deputy Governor Warns of Inflation Risks, Signals Potential Rate Hike in September

Bank of Japan Deputy Governor Ryozo Himino signaled that policymakers may need to raise interest rates in September to prevent inflation from moving above the central bank's 2% target.

Himino's comments were seen as hawkish and reinforced market expectations for a rate increase, but he stopped short of committing to a specific timing or magnitude.

The BOJ has been closely watching Japan's wholesale inflation, which rose 7.2% year-over-year in July, driven by rising fuel costs, strong global demand, and elevated import prices due to the yen's weakness.

Himino argued that maintaining accommodative financial conditions could create risks, including a spike in inflation and abrupt rate hikes in the future.