Most Members Agree To Pursue Persistent Easing: BoJ Minutes

Most members of the Bank of Japan’s monetary policy board agreed that it was
appropriate to pursue powerful monetary easing, minutes from the bank’s October 30-31 meeting revealed on Tuesday.

The members agreed that the economy was expanding moderately with upside and downside risks to economic outlook being broadly balanced.

Most members were of the view that although the year-on-year rate of increase in the CPI had been sluggish recently, the rate of change was likely to continue on an uptrend and increase toward 2 percent, primarily on the back of the improvement in the output gap and the rise in medium- to long-term inflation expectations.

Meanwhile, few members said that implementing “extreme monetary easing measures only for the purpose of hastening to achieve the price stability target, side effects such as an accumulation of financial imbalances and an impaired functioning of financial intermediation could arise, consequently preventing monetary accommodation from producing the intended policy effects to a sufficient degree,” it showed.

At the meeting, the BoJ policy board voted 8-1 to hold the central bank’s target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY 80 trillion.

The BoJ board also voted to retain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

The central bank said it will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

The BoJ would make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target, the minutes added.

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