BOJ Opinion Summary Shows Board Remains in Favor of More Tightening

By Megumi Fujikawa

Bank of Japan policymakers continue to see the economic case for more interest-rate hikes, according to a summary of opinions from its last meeting, reinforcing expectations for further tightening ahead.

"The bank should decide on the next policy interest-rate hike when it is possible without becoming overly cautious," one BOJ member was quoted as saying in a roundup of opinions expressed at the October meeting.

At that gathering, the central bank decided to stay on hold after raising the policy rate to 1.25% in September, a move that brought rates to the highest level since 1995 and accelerated the pace of monetary tightening.

Economists and investors widely expect the central bank to conduct another 25-basis-point hike at its final meeting of the year in December, as inflation remains sticky. The BOJ has cited the impact of the Middle East conflict, a weak yen and the artificial-intelligence boom as key risks to its economic projections.

According to the opinions summary published Tuesday, one member said Japan's economy has entered a "new phase in which the bank needs to step up the pace of bringing the policy interest rate to the neutral interest rate," a level that neither restricts nor stimulates growth.

"With firms' resilience to rises in interest rates increasing, the effects of past rate hikes have yet to materialize, and financial conditions have remained accommodative," the member added.

In its latest outlook report released in October, the central bank said underlying inflation has reached its 2% target. Gov. Kazuo Ueda called the achievement a milestone but characterized efforts to sustain healthy price growth as a constant battle.

One member at last month's meeting called for shifting to a neutral interest rate soon to give the central bank more flexibility to hike or cut as needed.

"It is necessary to monitor financial conditions over the course of a few months after each policy interest-rate hike and to make haste slowly in adjusting the degree of monetary accommodation," a board member said.

The BOJ's summary of opinions doesn't identify speakers by name.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

November 09, 2026 23:29 ET (04:29 GMT)