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Bank of Japan board members are likely to pay closer attention to price trends at a meeting in January as they consider whether it still makes sense to flag downward risks for inflation.

“Inflation expectations, including medium- to long-term ones, have risen recently, and inflationary pressure is expected to strengthen,” one of the board’s nine members said at the December policy meeting, according to an opinion summary released by the central bank on Monday.

“As the government encourages firms to increase wages, attention is paid to their rates of increase for next year onward,” the member said.

The central bank will release its quarterly outlook report on prices and growth at the meeting on January 16-17. The BOJ has already made a decision on extending part of its COVID-19 support measures and paring back its aid for bigger businesses, removing that as a key agenda item for the January meeting.

Japan’s inflation remains subdued when compared with the accelerating price growth of other major economies, as firms continue to absorb higher input prices. Some government policies, such as a drive to lower phone charges, are also keeping the consumer price index in check. That’s causing the BOJ’s cautious stance to diverge from global peers such as the Federal Reserve.

Still, higher energy costs are starting to squeeze households and businesses. Several remarks from the summary flagged upward pressure on inflation from fuel and commodity costs and historic highs for input prices, though one member said it would be premature to adjust policy with price expectations yet to anchor around 2%.

Another member said that achieving the BOJ’s price goals by the end of the year ending March 2024 would be difficult, given developments in the output gap and inflation expectations.

At the December meeting, Governor Haruhiko Kuroda said Japan was not in a state to start discussing policy normalization, but things could change once the country moved closer toward its price target of 2%.

A shift in views on inflation in January could herald a gradual shift in that stance.

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