BoJ Minutes: Rate Hikes Still on the Table, but Not in a Rush

The Bank of Japan is leaning toward more rate hikes, but nobody's sprinting. Minutes from the central bank's September meeting, released Thursday, show most policymakers agreed further increases would be appropriate as underlying inflation edges closer to the 2% target.

The room wasn't unanimous on speed. One member pushed to accelerate rate hikes if inflation looks like it will overshoot the target, while another said there is "no need to take hasty action."

Policymakers flagged a stack of risks that could move inflation either way: the Middle East conflict, surging demand tied to artificial intelligence, and swings in foreign exchange rates.

Not everyone was comfortable with September's rate increase. The minutes reveal pushback from members who opposed it, with one warning that tightening further could squeeze production, employment and real incomes, and another arguing for more time to gauge economic conditions before moving again.

That split is the tension the BoJ now carries forward: inflation is firming, but the economy isn't clearly ready for a fast tightening cycle. For markets, the minutes read as a central bank still willing to hike, just not in a hurry.