BoJ’s Summary of Opinions from the July 30-31 meeting reveals that board members discussed further rate hikes after implementing the second interest rate increase this year at the meeting.
One member’s opinion stood out, suggesting that, assuming the price stability target is achieved in the second half of fiscal 2025, BoJ should raise the policy interest rate to the level of the “neutral interest rate.” This neutral rate is estimated to be “at least around 1 percent.” To avoid rapid hikes, BoJ should increase the policy interest rate in a “timely and gradual manner.”
The consensus among members is that economic activity and prices have been developing generally “in line with the Bank’s outlook.” Consequently, it is deemed appropriate for to raise the policy interest rate and adjust the degree of monetary accommodation.
One opinion highlighted that raising interest rates at a “moderate pace” aligns the adjustment in monetary accommodation with underlying inflation. Such moves “will not have monetary tightening effects.”
