Yields on Brazilian interest rate futures contracts rose in early trading on Thursday, after the central bank said that the country's economic growth is putting a benign inflation outlook at risk.
Domestic demand is pressuring core prices in Brazil, central bank policy-makers said in the minutes to last week's rate-setting meeting.
Future changes to interest rates will need to adapt as the inflation outlook changes, they added.
The yield on the contract due January 2011 DIJF1 rose to 11.27 percent from 11.20 percent.
The yield on the contract due January 2012 DIJF2 jumped as high as 12.25 percent from 12.16 percent, and was trading at 12.17 percent in mid-morning.
The two were the most highly-traded contracts of the early session.
The central bank last week raised its key lending rate to 10.25 percent from 9.5 percent, following on a hike of the same size in April from 8.75 percent.
Those interest rate increases came as Brazil's economy grew in the first quarter at its fastest year-on-year pace since at least 1996, when the government began tracking the data in the current format.
That booming growth has brought with it fears of inflationary pressures, and the central bank has clamped down on credit in an attempt to keep prices from rising too much.
The central bank's inflation target for the year is 4.5 percent, plus or minus 2 percentage points.
Brazil's currency, the real (BRBY), firmed 0.56 percent to 1.780 per dollar in the morning, as the greenback slipped against a basket of major currencies .DXY.
Stock futures <0#IND:> edged higher in the morning, as well. Futures on the benchmark Bovespa index for August INDQ0 rose 0.26 percent to 65,960.
(Reporting by Luciana Lopez, Editing by Chizu Nomiyama)