Potential for BOJ to raise interest rates faster

The summary of the Bank of Japan’s April interest rate meeting revealed that governing board members saw the potential for faster rate hikes. The summary of the Bank of Japan’s (BOJ) April interest rate meeting revealed that governing board members closely examined the impact of a weaker yen on inflation and saw the potential for faster rate hikes as a result. “If inflation continues to deviate upward from the baseline scenario against a weakening yen, it is quite possible that the pace of monetary policy normalization will accelerate,” one of the nine board members said, according to the summary of the April 25-26 meeting released on Thursday. Another said “attention should be paid to the risk that prices will deviate upward from the baseline scenario” due to the weakening yen and higher oil prices. One member also hinted that if the BOJ’s price outlook holds, the rate hike could happen sooner than financial markets currently expect. The summary came after BOJ Governor Kazuo Ueda this week changed his tone on the impact of a weaker yen, strongly hinting at the possibility of a rate hike.