Minutes of the BOJ's October meeting indicated that officials discussed the level of the neutral interest rate and the outlook for future rates amid continued price increases, drawing market attention to the possibility of an additional rate hike in December.
Minutes of the BOJ's October Monetary Policy Meeting, as reported by Reuters, suggest that officials discussed the neutral level of interest rates and the market's expectations for the peak in rates. The aim was to identify the "acceptable range" in which borrowing costs could rise without hindering growth.
The minutes contained a mix of warnings that the pace of rate hikes would need to accelerate if prices continued to rise, cautious views that excessive haste should be avoided, and strong calls to bring interest rates closer to their target level in the near future.
They also pointed to forecasts that consumer prices would begin rising in the autumn and to persistently high inflation risks from upward pressure on crude oil prices. Although the BOJ kept rates unchanged, it heightened its vigilance and raised expectations for an additional rate hike in December.
In surveys, many analysts expected the policy rate to be raised to 1.5% in December, with views that the peak for the policy rate would be in the range of 1.75% to 2.0%.