Ryozo Himino, Deputy Governor of the Bank of Japan (BOJ), emphasized the risk of higher-than-expected inflation during a meeting with business leaders in Saitama prefecture on August 27, 2026. He identified the ongoing Middle East conflict, increased demand for funding related to the expansion of artificial intelligence, and a weaker yen as potential factors that could push inflation upward.

While Himino's remarks reinforced market expectations for further monetary tightening, he stopped short of giving a direct indication about a possible interest rate hike in September 2026. The yen remained steady and bond yields were choppy as markets digested the comments and priced in the likelihood of a rate increase.

The discussion reflects the BOJ's cautious approach amid evolving global and domestic economic conditions.

Sources