BOJ Policymakers Debated Mounting Price Risks at June Meeting
The Bank of Japan's June meeting minutes reveal that policymakers were already concerned about broadening inflation risks even as they raised interest rates to a 31-year high.
The Policy Board voted 7-1 to lift the policy rate by 0.25 percentage points to around 1.0%, with Asada Toichiro dissenting on the view that downside risks to production and employment outweighed upside price risks.
A few board members expected consumer inflation to receive a significant boost in the second half of the current fiscal year as firms move ahead with plans to raise prices across a wide range of goods, citing elevated shipping and storage costs tied to securing alternative sources of supply.
This suggests that at least part of the board views current cost pressures as having a more durable, structural component rather than one that will simply unwind alongside any de-escalation in the Middle East.