BOJ Minutes Reveal Divided Board Debating Rate Hike Pace
The Bank of Japan's Policy Board held its key interest rate steady at around 1.0% in July, but the minutes from the meeting reveal a divided board.
Takata Hajime was the lone dissenter, arguing that the global shift toward tighter monetary policy meant the BOJ needed to adopt a more nimble approach and discuss the size of hikes rather than stick to a fixed pace.
The rest of the board rejected Takata's proposal for an immediate hike to around 1.25%, preferring to first assess how the June increase was flowing through the economy, given the roughly one to one and a half year lag typically seen before a rate rise affects inflation and activity.
Despite the hold, the tone of the discussion leaned cautious rather than settled, with members agreeing that underlying consumer price inflation was approaching 2% and risks to prices were skewed to the upside.