The minutes of the BOJ’s September meeting noted that it had entered a new phase requiring discussion of the size of rate hikes. The post-meeting decision raised the policy rate by 0.25% to around 1.25%, shortening the interval between rate hikes from roughly six months.
The minutes of the Bank of Japan’s September Monetary Policy Meeting revealed that one policy board member had expressed the view that the BOJ had “entered a new phase requiring discussion of the size of rate hikes.” Financial markets were reportedly discussing an acceleration in the pace of rate hikes and larger increases.
At the meeting, the BOJ decided to raise the policy rate by 0.25% to around 1.25%. Meanwhile, the interval between rate hikes was shortened rather than remaining at the previous roughly six-month level. The stated aim was to curb higher prices driven by surging crude oil prices and yen depreciation. 2 policy board members opposed the decision.
According to the minutes, many members recognized the risk that the inflation rate could exceed the BOJ’s 2% target and confirmed a policy of continuing to raise rates. One member expressed the view that the latest rate hike would bring rates closer to the neutral rate, at which “agile policy decisions are possible” without either overheating or cooling the economy.