FX.co ★ BoJ Takata Urges Nimble Approach to Rate Hikes

Bank of Japan (BoJ) board member Hajime Takata called for a flexible, data-driven approach to further interest rate hikes, warning that inflation is nearing the Bank’s 2% target and that risks of economic overheating are increasing. Speaking to business leaders in Hokkaido, he described 2026 as a “regime change,” noting that monetary policy will no longer follow a fixed pace but instead adjust to evolving domestic and global conditions. Takata, seen as one of the more hawkish members of the board, had advocated raising the benchmark rate to 1.25% at the July meeting. His proposal was rejected in an 8–1 vote, and the rate was kept at 1%.

Meanwhile, Governor Kazuo Ueda emphasised that the BoJ will continue to raise rates as long as financial conditions remain accommodative, carefully balancing inflation risks against the cumulative impact of past tightening. He said the board will closely examine whether economic activity and price developments remain consistent with its baseline outlook and will reassess the balance of risks at its next policy meeting.