The Bank of Japan released the minutes of its June monetary policy meeting, showing that members shared the view that continued rate hikes in line with economic, price, and financial conditions are appropriate. Some members estimated Japan's neutral interest rate at around 2 percent and pointed out the need to approach the neutral rate as quickly as possible to avoid the need for sharp rate hikes in the future. At the meeting, the rate hike was decided by a majority vote of seven to one, with board member Toichiro Asada opposing due to downside risks to production and employment from the Middle East situation. Regarding government bond purchases, the plan to reduce monthly purchases to 2.1 trillion yen in the January to March 2027 quarter was maintained, while it was decided by a majority vote to halt the reduction from April 2027 onward and continue purchases at around 2 trillion yen per month.
BOJ minutes confirm continued rate hikes and some members urge reaching neutral rate quickly, implying higher yields.
