Bank of Japan minutes of the September meeting. The meeting created some shock waves with two dissenters seeking an immediate rate rise. The minutes show cautious path toward further rate hikes amid trade uncertainty. BOJ minutes highlight cautious rate-hike path as policymakers weigh inflation dynamics and trade risksThe Bank of Japan’s September meeting minutes showed policymakers largely agreed that real interest rates remain very low, and the central bank will likely continue raising rates gradually if its economic and price projections materialise.Members underscored “high uncertainty” surrounding global trade policy, emphasising the need to carefully assess the effects of tariffs and overseas developments on Japan’s economy and inflation before making further policy moves.A few participants said it was appropriate to maintain current monetary settings for now to observe the impact of recent U.S. tariff measures and global headwinds. One member warned that Japan’s economy could stall temporarily due to those external shocks and urged continued policy support for growth.Several members agreed that the conditions for another rate hike are gradually falling into place, though stressed the importance of avoiding a surprise move. One policymaker said it “would not be too late” to wait for more concrete data before proceeding with rate normalisation.Another member said it might be a suitable time to resume rate hikes, noting that more than half a year had passed since the last increase, though it would be prudent to wait for greater clarity on the U.S. slowdown.Some members focused on wage and profit trends, saying policymakers need to be confident—based on corporate earnings, profit outlooks, and early wage-negotiation data—that Japan’s pay-hike momentum will remain intact. Others noted that incoming data such as first-half earnings results, full-year forecasts, and the upcoming Tankan survey will be key to guiding policy decisions.While one member said waiting to hike could improve visibility on the U.S. economy, others warned that the cost of delaying normalisation would gradually increase. A few members added that, when weighing the costs and benefits of waiting, the BOJ must remember Japan’s long experience with deflation, cautioning against excessive hesitation.Another member said it was appropriate to maintain easy monetary conditions for as long as possible while inflation expectations remain insufficiently anchored, underscoring the need for support until price gains become self-sustaining.Additional discussion centred on inflation trends. One member said food price increases appear to be gradually peaking, while others noted price rises are broadening, even as the impact of higher food costs—including rice—on broader inflation is likely to fade ahead.A few members agreed that underlying inflation is gradually accelerating toward, but has not yet reached, the 2% target, while one said it was important to scrutinise whether inflation will stabilise around 2% using model-based analysis.Some members observed that underlying inflation is a crucial concept but may be difficult to use as a communication tool for monetary policy. Another said the BOJ should focus its messaging on actual price movements, given that inflation is now quite close to 2%.There were also differing views on risks: one member highlighted upside risks to inflation, including potential fiscal stimulus effects, while another said stagnating services consumption meant cost-push pressures may not translate into broader inflation gains.A number of members noted that exporters’ profits have built buffers against U.S. tariffs due to several years of a weak yen, while another observed that the impact of U.S. tariffs has been smaller than expected and unlikely to derail Japan’s economy. ---Overall, the minutes portray a central bank balancing cautious optimism on inflation with lingering global risks, reinforcing expectations that the BOJ will continue on a measured, data-dependent path toward policy normalisation.---Full text: Minutes of theMonetary Policy Meetingon September 18 and 19, 2025----From the day:investingLive European markets wrap: Yen fades BOJ gains; dollar firms, stocks tentativeWe had the "Summary of Opinions" from this back on September 30. This article was written by Eamonn Sheridan at investinglive.com.