BoJ Signals Year-End Rate Hike Amid Rising Prices: July Summary

The Bank of Japan is increasingly open to raising interest rates, with one policymaker suggesting a hike could come as early as year-end, according to the July meeting summary. While the central bank kept rates steady at 0.5%, it raised its inflation forecasts and gave a more upbeat economic outlook. Several members cited mounting inflation risks, warning the bank must not “miss the opportunity” to hike and should act “in a timely manner” to avoid sharper moves later. One noted the BoJ may exit its wait-and-see stance by year-end if the U.S. economy weathers tariffs. Some uncertainty remains over U.S. trade policy, though one member welcomed Japan’s deal with the U.S. as “great progress.” Inflation expectations are nearing 2%, with concerns they may rise further. The caution echoed the central bank’s latest report, which warned of persistent food-driven inflation.