BOJ Policy Makers Debate Faster Rate Hikes Amid Inflation Risks
The Bank of Japan (BOJ) policy makers debated the need for faster interest rate hikes in July, according to minutes from their meeting. The central bank raised rates in June and paused in July before pushing its policy rate to a 31-year high of 1.25 per cent in September. Many BOJ policymakers saw mounting inflation risks and called for quicker interest rate increases.
The BOJ had been conducting money market operations in accordance with the guideline for money market operations decided at the previous meeting on June 15 and 16, 2026. The uncollateralized overnight call rate had been in the range of 0.976 to 0.981 percent. In June 2026, the BOJ conducted Japanese government bond (JGB) purchases of about 2.7 trillion yen per month.
BOJ members agreed that financial conditions remain accommodative and noted that consumer prices are rising due to increased import costs. The Services Producer Price Index (All items) rose 3.7 percent from the previous year, while the Services Producer Price Index (All items