Global Market: BOJ policymakers push for faster rate hikes as inflation risks mount

Bank of Japan raised its policy rate to 1 percent, the highest in 31 years, with most policymakers pushing for faster rate hikes towards an estimated neutral level of around 2 percent, citing building inflationary pressures from weak yen, elevated energy costs, and AI-driven demand. Markets expect another hike before year-end, potentially taking the rate to 1.25 percent in Q4, while Japan's wholesale inflation hit a three-year high of 6.3 percent. Faster BOJ normalisation risks unwinding yen carry trades and triggering FII outflows from emerging markets including India.