Bank of Japan members call for faster rate hikes as inflation hits 2% target
The Bank of Japan's October meeting minutes show some policymakers urging faster interest rate increases as core inflation reaches the 2% target. One member said the bank must accelerate the pace of adjusting rates to neutral levels, while another warned of risks to the economy if rates rise too qui
The Bank of Japan has released a summary of opinions from its October policy meeting, revealing that some board members are calling for an accelerated pace of interest rate increases as core inflation reaches the central bank's 2 per cent target.
According to the summary, one member said that the effects of previous rate hikes have yet to fully materialise, and that financial conditions remain accommodative. The member noted that Japan is entering a new phase, and that the bank must accelerate the adjustment of interest rates towards a neutral level.
Another member argued that with the underlying inflation rate having reached 2 per cent, the central bank needs to move policy rates to a neutral level as quickly as possible.
However, the summary also noted that some members cautioned against the risk that future rate increases could drag down the economy and push inflation lower.
The Bank of Japan held its latest policy meeting on October 29 and 30, where it decided to keep its key interest rate unchanged at 1.25 per cent.