Bank of Japan Deputy Governor Himino Ryozo (氷見野良三) said in a speech in Saitama that it was necessary to be more alert than ever to upside risks to inflation. He emphasized the risk that underlying inflation could exceed 2%, and expectations are spreading in the market that the BOJ could proceed with an additional rate hike at its September meeting.
Bank of Japan Deputy Governor Himino Ryozo (氷見野良三) said in a speech in Saitama on the 27th that it was necessary to be more alert than ever to upside risks to inflation. In particular, he emphasized the risk that the underlying inflation rate, which the BOJ closely monitors, could exceed its 2% price stability target.
In the speech, he said the situation had shifted to one in which the question of whether inflation could “exceed 2%” had become relevant to policy decisions, and said of future monetary policy: “We intend to discuss it thoroughly at each Monetary Policy Meeting.”
Market expectations are spreading that the BOJ will proceed with an additional rate hike to achieve price stability at its Monetary Policy Meeting on 17–18 September. At a news conference after the previous meeting in July, BOJ Governor Ueda Kazuo (植田和男) cited higher crude oil prices, AI-related demand and the weaker yen as inflation risks. He said of future rate hikes, “We intend to discuss them thoroughly at future Monetary Policy Meetings,” and reportedly did not rule out a rate hike at the September meeting.
The speech has also been viewed as indicating that the BOJ will continue to discuss its policy decisions at each meeting.