BOJ June meeting minutes – members agreed must maintain current easy monetary policy

The ‘Summary’ of the Bank of Japan June 2023 meeting was indicative of a change to come at the July meeting:

While the change we got in July was minor, anything new from the Bank of Japan is significant.

Summary headlines via Reuters:

  • Members agreed BOJ must maintain current monetary easing to stably,
    sustainably achieve price target
  • Many members said it
    was appropriate to sustain monetary easing to support changes seen in
    corporate wage, price-setting behaviour
  • One member said it
    was premature to shift policy at a time companies becoming more keen
    to boost wages, investment
  • A few members said
    premature policy shift could mean BOJ will lose opportunity to
    achieve price target
  • One member said the
    chance BOJ is under-estimating sustainability of price rises cannot
    be ruled out
  • One member said BOJ
    must sustain monetary easing with an eye on side-effects of policy
  • Members shared the
    view no need to make operational tweaks to YCC at this point
  • One member said BOJ must avoid as much as possible a spike in
    interest rates caused from prospects of exit from easy policy
  • One member said BOJ
    must consider reviewing YCC at early stage to avoid big rate
    volatility upon future exit from easy policy
  • A few members said
    when BOJ were to review YCC, it must be mindful of risk that doing so
    could be seen by markets as move toward monetary tightening
  • Several members said companies continue to pass on higher import
    costs, raising prices for longer period than expected
  • Several members said
    domestic factors appear to be playing increasing role in pushing up
    consumer inflation
  • One member said must
    look at medium-, long-term inflation expectations closely as their
    moves will be key to operating YCC
  • One member said
    there was risk inflation might not fall back below 2%, remain
    elevated above 2%
  • One member said
    various indicators gauging trend inflation exceeding 2%, so there is
    chance inflation may not fall back below 2%
  • Several members said
    must be mindful of risk Japan’s economy, inflation may come under
    pressure from US, Chinese, overseas economic slowdown
  • Many members said
    risks to inflation were skewed to upside for time being

The Bank of Japan meeting 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.
  • the Minutes are a more detailed record of the meeting and include an overview of economic and financial developments in Japan, the members’ discussions and the reasons behind the decisions made. The minutes offer a more comprehensive account of the meeting, including the perspectives of individual members, which can provide more detailed insights into the policy outlook.

Bank of Japan Governor Ueda

This article was written by Eamonn Sheridan at Source