Bank of Japan policymakers agreed at their September meeting that the central bank should keep raising interest rates, minutes released on Thursday showed, with some members arguing the pace of tightening may need to quicken if inflation threatens to overshoot.
The minutes of the 17–18 September meeting, published by the Bank of Japan on Thursday, record a board debating how fast to move rather than whether to move at all. At that meeting the bank raised its key rate by a quarter of a percentage point to 1.25 per cent, its highest level in 31 years, in a 7–2 vote.
“If signs of an upward deviation in prices were observed, the BOJ would need to accelerate the pace of rate hikes,” one member was quoted as saying in the minutes. Another said the bank did not need to act hastily, but should guide policy appropriately “to prevent excessive and persistent price rises”.
Members agreed it was appropriate to keep lifting rates and to adjust the degree of monetary easing, given that underlying inflation was approaching the bank’s 2 per cent target while financial conditions remained accommodative. One member favoured moving the policy rate closer to its neutral level relatively soon, to leave room to adjust in either direction.
Inflation was the dominant concern. Many members projected consumer inflation to accelerate from the autumn, as surveys showed an increasing number of price rises for food items, and several pointed to a renewed rise in crude oil prices driven by prolonged conflict in the Middle East. One member noted crude prices had risen about 50 per cent since July.
“The BOJ should continue to act in a timely manner without becoming overly cautious” about raising interest rates, one member was quoted as saying.
The two dissenters at the September meeting, Toichiro Asada and Ayano Sato, preferred to hold the rate at 1 per cent. Asada argued that with core inflation below 2 per cent the economy could not necessarily be called strong, while Sato said economic and price trends had not substantially accelerated.
Since the meeting, the bank held rates at 1.25 per cent in October, while signalling vigilance on inflation risk — a stance that has cemented market expectations of a further rise in December. The minutes reinforce that the board’s debate is now over the pace of tightening, not its direction. Note: individual board members are not named in the minutes except for the two dissenters, whose votes were already public, so the hawkish comments above are attributed to unnamed members as reported.
Sources: Reuters, “BOJ board saw the need to keep raising rates, September meeting minutes show” (https://www.reuters.com/world/asia-pacific/boj-board-saw-the-need-to-keep-raising-rates-september-meeting-minutes-show-2026-11-05/); Bank of Japan, minutes of the Monetary Policy Meeting of 17–18 September 2026, released 5 November 2026.
