BOJ Seeks September Rate Hike Amid Rising Inflation Concerns

The Bank of Japan (BOJ) is considering raising interest rates as early as September and may accelerate the pace of tightening from its current rate of roughly twice a year.

According to sources, the BOJ's growing alarm over price pressures from the Middle East conflict, strong global AI demand, and the yen's downtrend has led them to consider an earlier rate hike than initially thought.

The two-year Japanese government bond yield rebounded after Reuters reported on the central bank's deliberations, while the five-year yield rose to a record high.

Since exiting a massive stimulus in 2024, the BOJ has raised interest rates at a pace of roughly twice a year, including in June when it took rates to a 31-year high of 1%.