Bank of Japan Reportedly on Alert for Faster Rate Hikes Due to Inflation Risks

Sources familiar with the Bank of Japan's (BOJ) thinking indicate that the central bank remains on alert for upside inflation risks that could lead to faster interest rate hikes than markets currently project. While the BOJ is expected to keep its policy rate steady at 1% at its upcoming meeting, new quarterly projections may offer clues on the timing of future hikes. Rising costs from a weak yen and strong AI demand are offsetting some declines in oil prices, contributing to inflation concerns.