Bank of Japan opinions show board split on pace of rate rises

The Bank of Japan’s Summary of Opinions from its October 29 and 30 policy meeting shows a board split on pace rather than direction. Several members said underlying CPI inflation is at a level generally consistent with the 2 percent price stability target and argued the bank should continue raising the policy rate, bring it to the neutral level soon, and in one view step up the pace of that move, with the neutral rate judged considerably above 1 percent in another opinion and core inflation projected to exceed 3 percent toward the end of the fiscal year.

Other members counselled holding the rate at that meeting to examine risks and the cumulative effects of past hikes, warning that a further rise could weigh on activity. Members also judged it appropriate to change the pace of the bank’s sales of exchange-traded funds, nearly a year after those sales began in January.