BOJ debated need for more rate hikes, scope for faster moves, September minutes show

Minutes from the Bank of Japan’s September meeting show that board members supported further interest-rate increases, with some open to moving more quickly if price pressures intensified. Business Recorder reported that the discussion has strengthened expectations for a possible December hike, after the central bank left rates unchanged in October.

The BOJ raised its policy rate to 1.25% in September, its highest level in 31 years, and members discussed how far rates could rise without restraining economic activity. A Reuters poll found many analysts expect a December move to 1.5%, while estimates for the eventual peak cluster between 1.75% and 2.0%; BOJ staff put the neutral-rate range at 1.1% to 2.5%. Members cited food-price increases and higher crude oil prices as inflation risks, while acknowledging uncertainty about the appropriate rate ceiling.