BOJ September meeting summary – Yen, oil price moves may stop inflation from falling much

From the Bank of Japan Summary of Opinions at the Monetary Policy Meeting on September 21 and 22, 2023.

Headlines via Reuters:

  • One member said inflation likely to slow ahead
  • One member said
    inflation exceeding 2% but this is largely due to firms passing on
    higher import costs
  • Inflation likely to
    keep rising next fiscal year due to expected rises in transportation,
    public service fees
  • One member said
    seeing signs that positive cycle rising wages and inflation may be
    kicking off
  • One member said
    there is chance next year’s wage growth may exceed that of this year
  • One member said
    given recent fx, oil price moves, there is chance inflation may not
    slow much and overshoot expectations
  • One member said no
    need to make additional tweaks to YCC as long-term rates moving
    fairly stably
  • One member said end
    to YCC, negative rate must be tied to success of achieving 2%
    inflation target
  • One member said to
    sustainably hit price goal, wage gains must become sustained and lead
    to inflation driven by service prices
  • One member said
    there is still some distance but japan nearing achievement of price
    target, so latter half of current fiscal year will be crucial phase
    in determining next year’s price outlook, other factors
  • One member said
    cannot determine now timing of policy tweak as that will depend
    largely on economic, price conditions at the time
  • One member said
    BOJ’s communication, guidance must be made in a way that does not
    constrain too much its freedom on timing, order of policy move
  • One member said it
    is important to prepare for exit from risk-management perspective as
    we could have clarity around January – March next year on whether 2%
    inflation target can be met in sustained, stable fashion
  • One member said
    side-effect of YCC remains even after steps in July to make it more
  • One member said even
    if BOJ ends negative rate policy, monetary conditions will remain
    accommodative as long as real interest rates are negative

There is a lot of ‘one member’ in that lot. Which is hardly suggestive of a consensus on any of it.

USD/JPY is little changed:

Earlier from the BOJ:

This article was written by Eamonn Sheridan at Source