BoJ Open to Faster Rate Hikes, Cites Yen Weakness as Inflation Risk
Sources indicate the Bank of Japan may raise interest rates at a pace quicker than every six months, as officials view recent yen depreciation as an upside risk to inflation. The central bank is also said to be close to a stage where it is anchoring, not spurring, inflation.
According to sources, the Bank of Japan is considering accelerating the pace of interest rate hikes beyond the current six-month cycle. Officials reportedly see the recent weakness of the yen as an upside risk to inflation, which could prompt faster policy normalization.
The central bank is also described as being close to a stage where it is anchoring inflation expectations rather than actively spurring further price increases. Despite the hawkish signals, the BoJ is widely expected to hold rates steady in July after a June hike.
These developments underscore a shift in the BoJ's stance amid persistent yen depreciation and evolving inflation dynamics.
Source: First Squawk