- Many Bank of Japan policymakers saw the need to focus on mounting inflation risks, with some calling for faster interest rate increases, according to the July meeting minutes.
- The minutes cement the case for further hikes to still-low borrowing costs, after the BOJ raised rates in June and paused in July.
- A faster BOJ normalization path supports the yen and pressures Japanese government bonds and yen-funded carry trades that rely on ultra-low Japanese rates.
Quotes
“cementing the case for further hikes to still-low borrowing costs”
“Bank of Japan debated need for faster rate hikes, July minutes show”