BoJ minutes due on the September hike that split the board
The Bank of Japan releases the full minutes of its September 17 and 18 policy meeting at 8:50 a.m. Tokyo time on Thursday, and they cover one of the most consequential decisions of the current tightening cycle.
At that meeting the BoJ raised its policy rate by 25 basis points to 1.25%, the highest since 1995, on a 7-2 vote. The hike came three months after the previous one, compared with six months between earlier moves.
The dissents drew as much attention as the hike itself. Toichiro Asada and Ayano Sato preferred to keep the rate at 1%, with Asada pointing to core inflation below 2% and questioning whether the economy was strong enough to absorb another increase. Sato later said she voted against because consumption lacked momentum and underlying inflation was not picking up pace. Their dissents pushed down the yen as markets read them as a sign that further hikes would face resistance.
The minutes should add depth to the Summary of Opinions released on October 1, particularly on how the majority weighed the pace of tightening now that the rate sits within the BoJ’s estimated 1.1% to 2.5% range for Japan’s nominal neutral rate. Traders will also look for discussion of the upside price risks the bank flagged in July, when it warned of an inflation overshoot from soaring fuel costs, rising import costs from a weak yen and strong AI demand.
Some of that debate has since moved on. At its October meeting the BoJ held at 1.25% in an 8-1 vote, with Hajime Takata dissenting in favour of a hike to 1.5%. Asada and Sato backed the hold. The bank said underlying inflation has reached levels consistent with its price target and accelerated the pace of its ETF sales, while it revised up the price outlook for 2027 to 2.6%.
That makes the September minutes more a record of how the Board reached this point than a fresh signal. Any sign that the majority favoured a quicker pace, however, would add weight to speculation about a December move.
This article was written by Eamonn Sheridan at investinglive.com.