Bank of Japan (BOJ) members agreed the central bank should continue raising interest rates in line with developments in economic activity and prices amid the ongoing Iran war, minutes of the March meeting showed on Thursday.
The Middle East turmoil has caused a surge in oil prices, increasing inflationary pressures and weighing on the economy of countries dependent on fuel imports.
The BOJ members said rate hike decisions should be made at each monetary policy meeting, taking into account the achievement of economic activity and price outlook, underlying inflation, and outlook risks.
One member said the BOJ should adjust the monetary accommodation degree without long intervals under current financial conditions, where an uptrend in prices is likely to remain.
Another member stressed the need to keep underlying inflation from exceeding 2% and said the bank must not hesitate to raise rates unless the economic outlook or wage-setting resolve among small and medium-sized firms deteriorates sharply.
In March, the BoJ board voted 8-1 to keep the policy rate at around 0.75%, with one member dissenting in favor of a hike to 1%.