BOJ Hawks Call for Faster Rate Hikes Amid Inflation Risks

The Bank of Japan's July policy meeting revealed a growing number of board members advocating for faster interest rate hikes, citing inflation risks from a weak yen and elevated energy costs.

At least three of the nine members believe the BOJ should raise borrowing costs more quickly than its current trajectory of roughly two hikes per year. One member warned that 'the risk of waiting is no longer marginal' and urged the bank to 'accelerate the pace of adjustment to the degree of monetary accommodation.'

The hawkish tone has solidified market expectations that the BOJ could deliver its next rate increase as soon as September, with odds now at roughly two-in-three.