BOJ Policymakers Debate Faster Rate Hikes Amid Inflation Concerns

The Bank of Japan (BOJ) policymakers debated the need for faster interest rate hikes in their July meeting, according to minutes released on Monday.

The central bank raised interest rates in June and paused in July before pushing its policy rate to a 31-year high of 1.25 percent this month due to mounting inflation risks, particularly from fuel and raw material imports caused by the Middle East war and weak yen.

Many members saw the need to focus on upside price risks and some called for faster interest rate increases, with one member stating that 'markets appeared to be expecting the BOJ to raise interest rates with intervals of about six months. But the pace of rate hikes could be faster than such market expectations...'

The BOJ must pay particular attention to upside price risks and adjust its policy rate nimbly, another member said.