Potential for BOJ to raise interest rates faster
The summary of the Bank of Japan’s April interest rate meeting revealed that board members saw the potential for faster interest rate hikes.
The summary of the Bank of Japan’s (BOJ) April interest rate meeting revealed that board members closely examined the impact of the weak yen on inflation and, as a result, saw the potential for faster interest rate hikes.
“If inflation continues to deviate upwards from the baseline scenario against the backdrop of a weakening yen, it is quite possible that the pace of monetary policy normalization will increase,” one of the nine board members said, according to the summary of the April 25-26 meeting published on Thursday.
Another opinion was that “attention should be paid to the risk of upward deviation of prices from the base scenario” due to the depreciation of the yen and high oil prices. One member also pointed out that if the BOJ’s price outlook is realized, the interest rate increase may occur earlier than financial markets currently expect.
This summary comes after BOJ Governor Kazuo Ueda changed his tone this week regarding the impact of the weak yen, strongly hinting at the possibility that it could lead to a rate hike.