The discussion revealed differing views among the nine-member board. Some members argued that raising rates toward neutral levels would support long-term economic and price stability. Others expressed concern that recent yen declines could push up import costs, potentially causing inflation to overshoot.
The minutes noted, “Some members said given the neutral interest rate was higher than the current policy interest rate, adjusting the degree of monetary accommodation in accordance with improvement in economic activity and prices would help achieve economic and price stability in the long run.”
At the October 29-30 meeting, the BOJ maintained its policy rate at 0.5%, though Governor Kazuo Ueda signaled the possibility of a near-term rate hike. Hawkish board members Hajime Takata and Naoki Tamura dissented, proposing an increase to 0.75%, but their motion was not adopted at that time.
By December, the BOJ raised rates to 0.75%—the highest level in three decades—reflecting growing confidence among members that economic conditions were suitable for tighter monetary policy.
The October minutes showed that while many policymakers already saw the case for a rate hike, they sought greater clarity on factors such as whether companies would continue raising wages next year and the potential impact of higher U.S. tariffs. One member also highlighted uncertainty surrounding the policy direction of Prime Minister Sanae Takaichi’s recently inaugurated administration, which had taken office just over a week before the meeting. This limited the BOJ’s ability to gauge the new government’s stance on monetary policy.
Overall, the minutes underscore a careful balancing act at the BOJ, as policymakers navigate between supporting stable growth, containing inflation, and monitoring external and domestic uncertainties.