BoJ Minutes Suggest Faster Monetary Tightening as September Rate Hike Prospects Rise

The Bank of Japan (BoJ) minutes from its June policy meeting revealed signs that the central bank may be moving towards a faster pace of monetary tightening.

The minutes showed that several BoJ members believed monetary conditions would remain accommodative after the rate hike in June, and that inflation risks remained to the upside.

This has increased the probability of a September rate hike to nearly 60%, with data released today also reinforcing this prospect. Labour cash earnings rose 3.4% year-over-year in June, up from 3.2%, while the same sample reading monitored by the BoJ jumped sharply from 2.9% to 4.4%.

US Treasury Secretary Scott Bessent stated that he was 'highly confident' Japan would follow intervention with policy actions and that BoJ Governor Ueda would do what is needed.