BOJ Policy Board Calls for Faster Rate Hikes Amid Inflation Risks

At its July policy-setting meeting, members of the Bank of Japan's (BOJ) Policy Board called for faster interest rate hikes due to rising inflation risks. According to minutes released on Monday, a BOJ Policy Board member stated that waiting could no longer be considered marginal.

The member emphasized the need for the central bank to accelerate the pace of adjusting monetary accommodation. The BOJ kept interest rates unchanged at the July meeting but decided to raise its policy interest rate to 1.25% at its next policy-setting meeting this month, marking the shortest interval during Governor Kazuo Ueda's tenure.

During the July meeting, many Policy Board members noted that underlying inflation, excluding temporary factors, was approaching 2%, and it would be essential to determine whether it would settle around that level. One member suggested that gradually adjusting the degree of monetary accommodation would prevent rapid interest rate hikes in the future and benefit all economic entities in the long run.