By Leika Kihara
TOKYO, Aug 5 (Reuters) - Bank of Japan policymakers debated mounting price risks that likely required more rate hikes even as they raised borrowing costs to a 31-year high in June, minutes of the meeting showed on Wednesday, highlighting the central bank's increased focus on broadening inflation.
A few board members said consumer inflation will likely get a significant boost in the latter half of the current fiscal year as firms plan price hikes for a wide range of goods, minutes of the June
meeting showed.
"Even if the Middle East conflict ends and crude oil prices decline, inflationary pressure would remain given the high costs of shipping and storage associated with the procurement of alternative source of supply," one member was quoted as saying.
The BOJ raised interest rates to a 31-year high of 1% at the June meeting as rising fuel costs from the Middle East conflict added to mounting inflationary pressures from a weak yen and tight job market.
The minutes also showed two board members calling for faster interest rate hikes to push the BOJ's policy rate closer to levels deemed neutral to the economy.
Most members said the pass-through from high oil prices had progressed at a relatively fast pace for business-to-business transactions, which could spread to consumer prices across a wide range of items, the minutes showed.
"Given this situation and how firms have become more active in raising prices, we must be more concerned about the risk of inflation accelerating further," they were quoted as saying.
At a subsequent meeting in July, the BOJ kept interest rates steady but said future policy discussions would focus on upside price risks, signalling the chance of a rate hike as soon as September.
(Reporting by Leika Kihara; Editing by Jacqueline Wong and Sam Holmes)
