Policymakers at the Bank of Japan (BOJ) are increasingly considering an interest rate hike, according to minutes from the central bank’s September meeting released Wednesday. The notes show that two board members advocated for an immediate rise, reflecting growing momentum for tighter monetary policy.

During the two-day meeting ending September 19, the nine-member BOJ board kept rates steady at 0.5%, rejecting proposals from two hawkish members to raise the benchmark rate to 0.75%. The discussions, however, highlighted a shift toward debating the timing of the next rate hike.

Some members cautioned against surprising markets, suggesting it would be prudent to wait for “a little more hard data.” Another member pointed to U.S. economic uncertainties but noted that, based on Japan’s economic conditions alone, it might be time to consider a rate increase.

The minutes also revealed a debate over the trade-offs of waiting versus acting, with some members advocating for hikes at “somewhat regular intervals” to reflect insights from corporate earnings, the BOJ’s tankan business survey, and other economic data. Others warned that delaying could gradually increase the cost of waiting amid persistent inflation pressures, particularly from high food costs.

Despite this, doves on the board emphasized Japan’s long-standing struggle with deflation and the importance of keeping inflation expectations anchored at the BOJ’s 2% target. “As long as inflation expectations were considered to be not well anchored, it was appropriate for the BOJ to maintain accommodative financial conditions as much as possible,” one member said.

Governor Kazuo Ueda signaled that a rate hike could occur as soon as the December meeting, following the BOJ’s decision to maintain steady rates in October. Since exiting a decade-long stimulus program last year, the BOJ raised rates to 0.5% in January, citing progress toward achieving durable 2% inflation. Core consumer inflation has exceeded the target for over three years, but Ueda has urged caution until underlying inflation stabilizes alongside sustained wage growth.