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BoJ officials split on rate-hike pace amid inflation risks

In the aftermath of the Summary of Opinions, USD/JPY held modest gains and traded near 158.00 as members weighed holding steady versus accelerating tightening.

Reported · Written up by our desk · Central Banks

FXStreet reports the Bank of Japan published its Summary of Opinions from the July 30-31 monetary policy meeting, showing a split among board members on whether to slow, continue, or accelerate the pace of rate hikes. One view supported keeping the policy rate unchanged, citing a roughly one-to-one-and-a-half-year lag before changes feed through to inflation and activity. Another member argued conditions remain accommodative enough to keep raising rates.

Some opinions suggested the hiking pace could turn faster than markets expect, citing upside risks to prices. Board members also characterized Japan’s economy as recovering moderately, while “crosscurrents” persist, including Middle East tensions weighing on activity and AI-related demand offsetting some of the drag. The material also noted that yen weakness can cut both ways for the outlook.

According to the Summary of Opinions, underlying CPI inflation is expected to reach a level broadly consistent with the price stability target between the second half of fiscal 2026 and fiscal 2027. Members attributed potential upward pressure to factors including the Middle East situation, AI demand, and yen weakness.

FXStreet adds that following the release, USD/JPY posted modest intraday gains and traded close to the 158.00 level. The Summary of Opinions documents how the BoJ is weighing the timing of tightening against inflation and growth risks.

Latest closeUSD/JPY 158.52 ▲0.6%

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