Minutes from BoJ's December 18th-19th meeting noted that members said it is appropriate to keep raising rates if the outlook is met, while a member said waiting another meeting in raising rates would be risky given impacts of FX on inflation

The BoJ minutes suggest a cautious yet proactive stance on rate hikes, indicating that further raises may come if economic conditions allow.

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Minutes from BoJ's December 18th-19th meeting noted that members said it is appropriate to keep raising rates if the outlook is met, while a member said waiting another meeting in raising rates would be risky given impacts of FX on inflation

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  • Most members said BoJ should not have a preset idea on rate hike pace and must scrutinise the economy, prices and markets in making decisions at each meeting.
  • A few members said adjusting degree of monetary support will help stabilise markets and have merits to the economy.
  • A member warned that divergence of real rates from equilibrium may impair long-term economic growth.
Context

Notably, there’s a concern among members about the risks of waiting too long due to potential currency impact on inflation, which could lead to increased market volatility. This commentary may shift expectations around the timing and frequency of future hikes, influencing JPY and bond markets moving forward.

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