BOJ Eyes Quarter-Point Hike Amid Inflation Risks
The Bank of Japan (BOJ) is considering raising its benchmark interest rate by a quarter point this month, according to people familiar with the matter. The decision would be in response to upward price risks, with BOJ officials seeing inflation risks as skewed to the upside.
Service prices and the ongoing weakness in the currency are strengthening the case for action, the people said. However, there has been no major change in the situation that would require opting for a larger move of half a percentage point.
The BOJ is also aware of the potential need for further rate increases beyond September and is open to adjusting the pace of rate hikes flexibly depending on economic developments and upside inflation risks. This means they aren't ruling out a faster pace of hikes, should conditions require it.