BOJ May Shift to Aggressive Inflation Fighting as Soon as December

Japan's central bank may change its approach to inflation-fighting as soon as December, according to former Bank of Japan official Tsutomu Watanabe.

The third wave of inflation in Japan is expected to be more modest than the past two, with consumer inflation excluding fresh food and fuel peaking near 3% around March next year.

However, underlying inflation is rising and close to 2%, which could prompt the BOJ to shift its approach from tolerating price rises to actively fighting inflation.

The BOJ's current slow pace of rate hikes has led to market doubts over its ability to curb inflation at around 2%.