BoJ Policymakers Sound Alarm on Inflation Risks Amid Weakening Yen

The Bank of Japan's June meeting minutes highlighted growing concerns over inflation risks. Most board members agreed that higher crude oil costs are quickly affecting business transactions and spreading into consumer prices.

Several policymakers warned that underlying inflation could exceed the 2% target, citing compounding pressures from a weak yen and tight labor market. One member emphasized that even if Middle East tensions ease and oil prices decrease, elevated shipping and storage costs for alternative energy would sustain inflationary pressure.

The minutes also revealed that two members supported faster rate hikes to move policy closer to neutral, as firms show greater willingness to raise prices. The BoJ lifted its policy rate to 1.0% in June but held steady in July, signaling that upside risks could justify another hike as early as September.