BOJ Minutes show belief that current monetary policy easing should be maintained (d’uh)

Bank of Japan April 2023 meeting Minutes

Headlines via Reuters:

  • A few members pointed out that past price increases in commodities
    and raw materials continued to be passed on to consumer prices with a
    time lag
  • A different member
    said that, in addition to a pass-through of higher raw material
    prices, an increasing number of factors had contributed to firms
    raising their selling prices
  • One member expressed
    the view that high wage increases could lead, for example, to an
    improvement in consumer sentiment
  • A different member
    expressed the view that it was uncertain whether pent-up demand would
    materialize to an extent where it would make up for private
    consumption restrained during the pandemic
  • One member expressed
    the view that, with labor shortages intensifying, high wage increases
    could be expected in 2024
  • One member said firms that had raised the starting salaries for new
    graduates in fiscal 2023 seemed to be planning to raise wages to some
    extent in fiscal 2024
  • One member expressed
    the opinion that wage growth in 2023 seemed to be partly attributable
    to temporary factors
  • One member said
    signs of a virtuous cycle between prices and wages had started to be
  • A few members said in order for CPI inflation to rise again toward 2%
    after decelerating, it was necessary for wage developments, firms’
    growth expectations, and medium- to long-term inflation expectations
    to improve
  • Some members said
    while firms’ price-setting stance had been changing, Japan’s CPI inflation was rather unlikely to remain elevated
  • Some members said it was appropriate for the bank to continue with
    the current monetary easing due to difficulty of assessing
    sustainability of future wage hikes, developments in inflation
  • A few members said
    it was necessary for the bank to continue to firmly support the
    momentum for wage hikes by maintaining monetary easing so that the
    nominal wage growth rate would rise sufficiently relative to prices
  • One member said
    while achievement of price goal was coming into sight, it was
    appropriate that the bank continue with monetary easing for the time
    being since there were both upside and downside risks
  • One member said
    signs of a virtuous cycle between wages and prices had started to
    emerge in Japan’s economy
  • The member continued
    that it was necessary for the bank to appropriately assess underlying
    developments in economic activity and prices so that its policy
    responses would not fall behind
  • A different member
    said the BOJ needed to avoid abrupt changes in interest rates, humbly
    monitor price and wage developments, and make responses at the right


  • Members pointed out
    that distortions on the yield curve were dissolving, agreed that
    there was no need to revise the conduct of yield curve control
  • One member said the BOJ could consider revising the conduct of YCC, but it was
    appropriate to wait and see a little longer in light of the situation
    in global financial markets
  • This member added that attention was
    warranted on upcoming bond market survey results
  • One member said
    BOJ should be careful to ensure that revision to the forward guidance
    would not be viewed as its willingness to raise the policy interest

On relations between the government and Bank of Japan:

  • The Ministry of Finance representative said Prime Minister Kishida
    and Governor Ueda recently shared the recognition that, with
    extremely high uncertainties, the government and the bank would
    nimbly conduct policies with eye on economic, price and financial
  • MoF Rep said Kishida, Ueda agreed at this point,
    there was no need to change joint statement between govt, BOJ

Bolding above is mine, there are a few useful snippets in there. The last one, on the joint statement, was a very hot topic at the time. The speculation was that a change to the statement, to allow the BOJ more flexibility to dial back ultra-easy policy, was imminent. Nope, it was not.

Full text is here: Minutes of the
Monetary Policy Meeting on April 27 and 28, 2023


The Minutes are preceded many weeks in advance by the ‘Summary’ of the meeting. The “Summary of Opinions” provides a concise summary of the views expressed by Policy Board members during the meeting. It does not attribute opinions to individual members but offers a general overview of the views held by the board.

For the April meeting the post is here:

and the full text is here:

The April meeting was a bit of a fizzer:

This article was written by Eamonn Sheridan at Source