BOJ's Himino Warns of Inflation Risks, Eyes Timely Rate Hikes

Bank of Japan Deputy Governor Ryozo Himino emphasized the need for timely interest rate hikes to combat inflation risks, echoing market expectations for a near-term increase. Speaking on August 27, Himino noted that underlying inflation is approaching 2% and that the BOJ must balance the need to gather information with acting promptly to avoid being behind the curve.

He highlighted mounting inflationary pressures caused by rising fuel costs from the Middle East conflict, robust global AI demand, and high import prices due to a weak yen. Himino stated that Japan has entered a phase where the BOJ must consider the possibility of underlying inflation exceeding its 2% target.

The Deputy Governor's comments have been closely watched by markets for clues on the pace and timing of future rate hikes. Himino's past record shows he delivers clear hints on upcoming policy shifts, leading analysts to believe a September rate hike is likely.