 "The Japanese flag flutters above the Bank of Japan headquarters in Tokyo (File/ AFP)")
Policymakers at the Bank of Japan (BOJ) signalled a growing consensus on the need for additional interest rate hikes, with some calling for “timely” action to address persistent inflation, minutes of the central bank’s January meeting showed on Wednesday.
According to the minutes, several board members agreed that borrowing costs should keep rising, although they did not commit to a fixed pace of tightening. One member stressed that tackling inflation had become an “urgent priority” and warned against delays in assessing the impact of earlier rate increases.
“Given that addressing rising prices was an urgent priority in Japan, the BOJ should not take too much time examining the impact of past rate hikes, and should proceed with the next rate increase without missing the appropriate timing,” the minutes quoted the member as saying.
Another policymaker advocated raising rates at intervals of a few months, arguing that timely tightening was essential to counter sharp declines in the yen, which have inflated import costs and added to domestic price pressures.
At its January policy meeting, the BOJ left its short-term interest rate unchanged at 0.75 per cent , while maintaining relatively hawkish inflation projections. The decision reflected a balancing act between supporting a still-fragile economic recovery and containing inflationary risks.
Japan has historically struggled with deflation , but recent global commodity shocks and currency weakness have pushed inflation above the central bank’s target, complicating its policy outlook. A weaker yen has particularly amplified imported inflation, raising the cost of energy and food.