BoJ Flags Energy-Driven Inflation Risk in March Minutes

2026-05-07 01:12 By Farida Husna 1 min. read

Many Bank of Japan board members saw a need for further rate hikes should the Iran war-driven energy shock persist and fuel broader inflation pressures, minutes from the March meeting showed.

While policymakers agreed temporary supply disruptions from Middle East tensions could be overlooked, they cautioned that a prolonged rise in energy costs risked second-round effects on expectations and underlying prices.

One member urged raising rates “without long intervals,” while another pressed for tightening “without hesitation” if the economy avoided major damage.

The BoJ left its short-term policy rate unchanged at 0.75% at the March 18–19 meeting, the first after U.S.–Israeli strikes on Iran.

At its April gathering, the central bank again held steady, though a more hawkish divide underscored growing concern over mounting inflationary pressures from higher fuel costs and lingering price gains.



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