BOJ Deputy Warns Inflation Risks Ahead, Markets Still Expect Rate Hike

Bank of Japan Deputy Governor Ryozo Himino warned about potential inflation risks on August 27, but stopped short of hinting at a rate hike in September. The deputy governor mentioned several factors that could lead to higher-than-expected inflation: the Middle East conflict, increased demand for funds related to artificial intelligence development, and the weaker yen. This warning reinforces market expectations of further monetary tightening.

Himino's statement came during a meeting with business leaders in Saitama prefecture. The Bank of Japan has been keeping an eye on inflation, which has been rising due to various global factors. Himino's comments suggest that the central bank is closely monitoring these developments and will take necessary actions if needed.