Bank of Japan September Minutes Back Further Rate Hikes as Bank of England Prepares First Increase in Three Years

Minutes from the Bank of Japan's September meeting, released on November 5, 2026, confirmed that board members agreed it was appropriate to continue raising the policy interest rate and to adjust the degree of monetary accommodation. The account does not specify a pace or timeline for future increases, but the breadth of agreement across the board signals a clear tightening bias.

Several members noted that underlying CPI inflation had recently come close to, or in one member's view already reached, the 2 percent price stability target. Some members flagged that services prices had continued to rise steadily over recent years, and warned that if the trend accelerated, underlying inflation could deviate upward from target. One member said that if signs of such an upward deviation appeared, the bank would need to accelerate the pace of rate hikes and that it was important to demonstrate the BOJ's determination to prevent price overshoots through nimble responses to overseas economic conditions.

On the neutral rate, many members acknowledged it was difficult to identify in advance, arguing the BOJ should adjust policy incrementally while monitoring changes in financial conditions, short-term interest rates, and how economic activity and prices respond. One member said it was desirable to bring the policy rate closer to the approximate neutral level relatively soon while preserving room for quick adjustment in either direction, and another said the bank should act in a timely manner without becoming overly cautious. A Cabinet Office representative called for proactive and appropriate action in the event of excessive market fluctuations and said the BOJ may need to factor its neutral rate estimates into its deliberations. The Ministry of Finance asked the bank to carefully assess the cumulative impact of past rate moves on the economy.

Separately, the Bank of England is widely expected to raise its benchmark rate from 3.75 percent to 4 percent, which would mark the first increase in more than three years. Analysts and market participants pointed to surging energy costs and inflation fears, in part linked to the Iran conflict, as the drivers behind the anticipated move. Meanwhile, the Reserve Bank of Australia faced internal friction after board members rebuked deputy governor Andrew Hauser for publicly signaling that a rate rise was very likely, and the Swiss National Bank's chairman reiterated the institution would not hesitate to adjust policy if price stability were endangered.