BOJ Minutes Reveal Calls for Faster Rate Hikes as Inflation Risks Mount

Bank of Japan policymakers debated accelerating interest rate increases at their July 30-31 meeting, with some members calling for faster hikes than market expectations, minutes released Monday showed. Markets were pricing rate hikes in roughly six-month intervals, but one board member said the pace "could be faster" given underlying inflation approaching the 2% target. Another urged the BOJ to "adjust its policy rate nimbly," while a third warned that waiting carried non-marginal risks and that delaying action could inflict "huge damage" on the economy. The BOJ held rates at 1% in July before raising its policy rate to a 31-year high of 1.25% in September, as Middle East conflict and a weak yen drove up fuel and raw material import costs. The minutes reinforce expectations of further tightening to still-low borrowing costs.