Bank of Japan policymakers signaled increased support for faster monetary tightening, according to the summary of opinions from the central bank's September meeting. Several members advocated for quicker rate hikes or moving rates closer to the neutral target in the near term, with multiple policymakers noting that underlying inflation is approaching or at the 2% target. One member suggested accelerating tightening if inflation risks overshoot forecasts, and officials warned of ongoing price pressures and upside risks from elevated crude oil prices linked to Middle East tensions. The signals follow September's rate hike to 1.25%, after which the BOJ governor emphasized a heightened focus on preventing inflation from overshooting the central bank's targets. Despite the prospect of tighter policy, the Nikkei 225 Index jumped 2.4% to above 68,000 on Thursday, its highest level in six weeks, while the Japanese yen weakened past 158 per dollar.
BOJ minutes signal faster rate hikes and tightening toward neutral, pushing JGB 10Y yields higher (bond prices fall).
BOJ signals faster tightening and higher rates, which strengthens the yen; the yen weakened past 158 but the policy signal favors JPY.
