The Japanese yen's weakness increases the risk of inflation, and the Japanese Central Bank is open to accelerating the pace of interest rate hikes

On 22 July, informed sources revealed that central bank officials were open to accelerating the pace of interest rate hikes, possibly at a faster rate than economists generally expected, because of the increased risk of inflation as the yen continued to weaken. According to informed sources, officials know that many Central Bank of Japan observers expect the Bank to increase interest rates approximately every six months, but they are willing to do so ahead of schedule, if needed, and there is currently no pre-set rate increase. The market generally expected that the Bank of Japan would maintain its policy at the meeting of the Board of Governors on 31 July. Prior to that, the Central Bank had raised the benchmark interest rate to 1 per cent last month, up from 31 years. Most observers believe that the interest rate hike last month will raise the Japanese Central Bank again in December. Officials expressed the view that, given that the potential inflation rate was close to the 2 per cent target set 13 years ago, there was a particular need to pay close attention to the risk of upward inflation。