Bank of Japan policy board members raised concerns about the weakening of the yen last month, pointing out the risk of a weak currency leading to higher prices, which in turn could affect consumer demand and the overall economy, according to minutes from the June policy meeting released Monday.

“A few members pointed out that, although the effects of the yen's depreciation varied depending on economic entity, at this point it was necessary to pay further attention to the negative effects of the depreciation mainly on households' real income and sentiment,” the minutes read.

Bank of Japan policy board minutes are released about six to eight weeks after the meeting.

“One of these members added that, with rapid movements in foreign exchange rates, progress in economic structural changes had not been able to keep up with these movements, and it had therefore been difficult for Japan's economy as a whole to receive the benefits of the yen's depreciation.”

Some members of the nine-member policy board mentioned that a weak yen could inflate import prices and put upward pressure on consumer prices, which would make it more difficult for the central bank to maintain its 2% inflation target.

Considering this risk, one member said the bank should closely monitor data for the next meeting and it should "raise the policy interest rate not too late," according to minutes of the two-day meeting held June 13 and 14.

At the time of the meeting, the yen was trading at about ¥157 to the dollar.

Another member countered that monetary policy should not be influenced by short-term fluctuations in the foreign exchange market.

In June, the BOJ chose to do nothing. It neither moved on rates nor on bond purchases, which had been running at about ¥6 trillion a month.

At its July policy meeting last week, the BOJ voted to increase its short-term policy rate target to 0.25% from a range of 0% to 0.1% as calls to defend the yen reached a fever pitch. The move surprised BOJ watchers. Most had forecast no rate rise and many had expected the bank to wait until September or October.

BOJ Gov. Kazuo Ueda was relatively hawkish during a news conference last week after the July policy meeting, saying that the rate increase was only a small change and would not significantly affect the economy.

Yet the BOJ’s sudden shift has rattled the markets.

The yen moved from about ¥152 to the dollar at the time of the July meeting to about ¥145 on Monday morning, while the 225-issue Nikkei average has plunged by about 20% over the past several trading days, with some analysts blaming the weak yen.

Some BOJ watchers expect another rate increase this year.