Bank of Japan minutes reveal officials considered tightening monetary policy amid prolonged energy supply risks from regional tensions.
Several Bank of Japan board members indicated a willingness to raise interest rates if the Iran conflict extended energy market disruptions, according to recently released minutes. The discussions highlighted concerns over sustained inflationary pressures from higher oil and gas prices.
The minutes reflect deliberations held before the latest policy meeting, where rates remained unchanged. Analysts had expected a cautious stance, given Japan’s fragile economic recovery. Previous BOJ guidance suggested patience on rate adjustments amid global uncertainty.
Markets have since priced in a lower probability of near-term BOJ tightening, though energy-sensitive assets remain volatile.