Future rate hikes on table as BoJ eyes inflation risks: July minutes

Some Bank of Japan board members expressed support for future rate hikes, even as the central bank unanimously held policy rates steady, according to minutes from its July meeting.

“The BoJ's policy rate is lower than the level deemed neutral, with prices remaining relatively high and the output gap being around zero recently,” one member noted.

The board agreed that food price pressures—especially from rice—should ease. One member pointed out that rice inflation stemmed not only from weather but also from long-suppressed production costs, while processed food prices were expected to moderate as global commodity prices declined.

The economy was seen as recovering moderately, though with pockets of weakness. Members emphasized the need to monitor the impact of U.S. tariffs, with one suggesting it may take another 2–3 months to fully assess the effects.

Private consumption remained resilient, supported by gains in employment and income, despite dampened sentiment from elevated prices.