BOJ Policymakers Debate Need for More Rate Hikes Amid Inflation Concerns

The Bank of Japan (BOJ) policymakers debated the need for more interest rate hikes at their September meeting, according to a summary of opinions released on October 1. Some members saw the need to accelerate the pace of rate rises or bring them closer to the central bank's goal soon.

Most opinions cited the need to follow September's rate hike with further increases in borrowing costs as inflationary pressure mounts. One member was quoted as saying, 'If signs of an upward deviation in prices are observed, the Bank will need to accelerate the pace of rate hikes.'

The BOJ raised interest rates to a 31-year high of 1.25% at its September meeting, with Governor signalling a new phase focused on keeping inflation from overshooting its target.

Several opinions pointed out that underlying inflation had reached or was close to hitting the BOJ's target of 2%. One member said while the BOJ did not need to take hasty action, it should raise rates to prevent excessive and persistent price rises with underlying inflation seen reaching 2% before long.