BOJ Rate Hikes May Accelerate Amid Inflation Concerns

The Bank of Japan's latest policy meeting has hinted at a possible acceleration in interest rate hikes. At least three board members suggested that the central bank could raise rates faster than its current pace.

According to the BOJ's summary of opinions from its July 30-31 meeting, policymakers kept the benchmark rate at 1%. One member argued that the BOJ should give greater weight to upside price risks than it previously did. The member stated, 'Given that underlying CPI inflation has been approaching 2% and greater consideration should be given to upside risks to prices than before, it could be considered that the pace of policy interest rate hikes will be faster than market expectations.'

Another member suggested accelerating the pace of adjustment to the degree of monetary accommodation. The risk of waiting is no longer marginal,' the member stated.

A third member urged the BOJ to avoid following a predetermined hiking schedule and instead signal clearly that it would respond to prevent upward deviation in prices.