BoJ June minutes flag rising inflation risks as members weigh faster rate hikes

Minutes from the Bank of Japan's June meeting showed growing concern that inflation pressures were becoming more persistent, with most board members judging that higher crude oil costs were quickly feeding through business transactions and into consumer prices. Several members warned that underlying inflation could exceed the 2% target as fuel costs added to pressure from a weak yen and a tight labor market, while some expected consumer inflation to accelerate in the second half as firms push through broad price increases. One member said inflation would likely remain elevated even if Middle East tensions eased and oil prices fell, because higher shipping and storage costs for alternative energy would keep prices under strain. The minutes also showed two members favoring faster rate hikes to bring policy closer to neutral, saying firms were becoming more willing to raise prices. The BOJ raised its policy rate to 1.0% in June, held steady in July and signaled that upside risks could justify another hike as early as September.