Tokyo, Nov. 5 (Jiji Press)–Most Bank of Japan policymakers shared concern that underlying inflation could exceed the central bank’s 2 pct price stability target at their Sept. 17-18 meeting, at which the BOJ decided to raise interest rates, minutes of the meeting showed Thursday. Most members concurred that ” there was a risk that underlying CPI (consumer price index) inflation would deviate upward to a level above the price stability target of 2 pct,” according to the minutes. These members agreed that it was appropriate for the BOJ to raise rates at the meeting. One member of the BOJ’s Policy Board said at the meeting that “underlying CPI inflation was now getting closer to 2 pct, and the perspective of stabilizing it at a level around 2 pct thus became important,” although the aim of monetary policy had been to push prices upward when CPI inflation was below 2 pct. “The member continued that, in that sense, it was considered that there had been a shift in the phase of monetary policy,” the minutes showed. Also at the meeting, a few members said that “when developments in asset prices, such as higher stock prices and the yen’s depreciation, were taken into consideration, financial conditions could be seen as being more accommodative.” One member said that “if signs of an upward deviation in prices were observed, the bank would need to accelerate the pace of rate hikes.” Still, another member said that “raising the policy interest rate at this meeting following the hike in June 2026 could have a negative effect on production, employment and real income in Japan,” suggesting that it was desirable for the BOJ to leave interest rates unchanged. At the September meeting, the BOJ decided by a 7-2 vote to raise the unsecured overnight call rate, Japan’s benchmark short-term interbank rate, by 0.25 percentage point to around 1.25 pct. END [Copyright The Jiji Press, Ltd.]
