According to a summary of opinions at the Bank of Japan's January meeting, some policymakers foresee consumer inflation briefly surging towards their 2% target as pricing pressures build up due to changing business price-setting behaviour.

Many board members, however, emphasised the importance of maintaining ultra-loose monetary policy to sustain a fragile economy facing new risks from an increase in Omicron coronavirus cases, according to the summary.

"There is a chance that YoY growth in consumer inflation will briefly approach 2%. If that occurs, it is critical to examine the facts behind the rise and whether they are sustainable" one of the BoJ's nine board members said.

"In the first half of 2022, consumer inflation could temporarily reach 1.5%. Whether such momentum can be maintained long enough for inflation to approach the BoJ's target of 2% will be determined by wage and inflation expectations, or, in sum, the strength of demand," said a second opinion.

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The BoJ boosted its price projections at its January meeting, but said it was not in a hurry to adjust its ultra-loose policy because inflation was still well below its objective.

Japan has not been immune to the effects of global commodity inflation, with wholesale prices increasing at a record pace.

Some BoJ policymakers saw indications of change and pointed to a rising number of businesses passing on greater costs to consumers, the January meeting summary showed.

"Many firms are now having to abandon their traditional view that prices will continue to fall, and change the way they set prices," a third opinion showed.

Others, however, were sceptical that inflation will sustainably increase towards the BoJ's objective. "It will be difficult to meet the BoJ's price target by the end of fiscal 2023," one board member said.