BOJ Shifts Focus to Preventing Inflation Overshoot

The Bank of Japan has shifted its policy focus to preventing inflation from overshooting its target, according to a summary of opinions from last month's policy meeting. The bank raised the policy rate to 1.25% in September, the highest since 1995, with a vote of 7-2 in favor of the increase.

The summary noted that one member said authorities had entered a new phase of policymaking aimed at keeping inflation from exceeding the 2% target. Another member cited the need to conduct policy to avoid excessive inflation.

Governor Kazuo Ueda's board voted to raise borrowing costs, with members noting that the neutral rate could deviate above the estimate and many firms see only limited impact of hikes taken so far.