BOJ Sees Need for More Rate Hikes Amid Rising Inflationary Pressure

The Bank of Japan (BOJ) policymakers debated the need for further interest rate hikes at their September meeting, according to a summary of opinions. The central bank raised rates to a 31-year high in September, with Governor Haruhiko Kuroda signaling a new phase focused on keeping inflation from overshooting its target.

The BOJ's policymakers saw the need for follow-through rate hikes to address increasing inflationary pressure. 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.'

Several opinions pointed out that underlying inflation had reached or was close to hitting the BOJ's target of 2%. Another opinion stated it is desirable for the BOJ to bring its policy interest rate closer to the approximate goal 'relatively soon' to allow scope to respond to unexpected developments in the economy.