The Bank of Japan's economy recovery has been moderate but faces temporary deceleration headwinds from higher energy and raw-material prices, according to minutes from its July 30-31 monetary policy meeting released Monday.
The BOJ Policy Board voted 8-1 to maintain its uncollateralized overnight call rate at around 1.0%, with board member Hajime Takata dissenting in favor of a 1.25% rate hike.
Members said underlying inflation was approaching the BOJ's 2% price-stability target, while financial conditions remained accommodative. The central bank said it would continue to adjust monetary accommodation in response to developments in economic activity, prices, and financial conditions.
The BOJ said global AI-related demand was supporting exports, production and business investment, but warned that renewed tensions in the Middle East and higher crude oil prices could weaken Japan's economy and push up inflation.

