BOJ Signals Faster Rate Hikes to Guard Against Inflation Overshoot

The Bank of Japan (BOJ) is preparing for faster and more frequent interest rate hikes to prevent inflation from overshooting its target. According to Reuters, the central bank aims to act pre-emptively to avoid extreme measures.

Bank of Japan Governor Kazuo Ueda emphasized that a consecutive increase could occur only if there were a risk of steep price rises or if underlying inflation were already above the 2% target.

Makoto Sakurai, a former BOJ board member, expects the central bank to raise its policy rate from 1.25% to 2% by around June next year.