BOJ Minutes Reveal Split on Timing of Next Rate Hike Amid Tariff Risks

The Bank of Japan’s newly released minutes from its June policy meeting show officials divided over the timing of further interest-rate increases as inflation edges above their projections and global trade tensions cloud the outlook. Several members said the central bank should be ready to resume rate hikes once there are clear prospects that U.S.–driven tariff frictions will stabilise and the domestic economy continues to track the BOJ’s forecast. Others argued for keeping the policy rate unchanged for the time being to support corporate profits while assessing the impact of the January rate rise. Participants agreed that the BOJ would likely continue raising its policy rate if growth and price trends unfold as expected, but they highlighted downside risks from the United States’ 145% tariff on Chinese goods and heightened uncertainty in the Middle East. A few members noted that expansionary fiscal and monetary measures abroad could cushion a global slowdown. The minutes also record concern over the recent jump in super-long sovereign yields worldwide. A Finance Ministry representative called for a flexible stance that safeguards bond-market stability as the BOJ tapers its Japanese Government Bond purchases, which several members said should proceed in a predictable manner.