BOJ policymaker urged rate hike size debate amid inflation risks: minutes

The BOJ decided at the Sept. 17-18 meeting to raise its policy rate to 1.25 percent from 1.0 percent.

The policymaker noted that the BOJ had raised rates at a moderate pace of twice a year in 2024 and 2025 as monetary policy in Japan diverged from that of other major economies.

As central banks in the United States and Europe had recently shifted toward rate hikes, the policymaker said the BOJ should respond flexibly to overseas developments and "discuss the size of a rate hike, rather than adhering to a certain pace of rate hikes."

The remarks suggest the BOJ may no longer be bound by its usual 0.25 percentage point increments and could adjust the size of rate increases depending on economic and financial conditions.

The minutes also showed many policymakers shared the view that there was a risk inflation could exceed the central bank's 2 percent target.