Takata Pushes for Faster Rate Hikes to Tame Japanese Inflation

Bank of Japan (BOJ) board member Hajime Takata is pushing for faster interest-rate hikes if inflation doesn't cool down. In a recent speech, he warned that investors shouldn't expect tidy, twice-a-year rate increases, as the BOJ will react to data on inflation and growth meeting by meeting.

Takata framed the outlook as 'data-dependent', meaning the central bank will adjust its policy based on current conditions. He also hinted at a shift in emphasis from trying to lift underlying inflation to stopping prices from overshooting.

The BOJ's next move could come as soon as September 18th, according to Reuters sources. Takata was the lone dissenter at the BOJ's July meeting, arguing for lifting the policy rate from 1% to 1.25%. However, faster tightening comes with a trade-off: if Japan's rates rise faster than those abroad, currency markets can react abruptly, creating foreign-exchange volatility.