BoJ Minutes: BoJ will raise rates if economic and price projections are realized
|The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook this Thursday, per the Minutes of the March 18-19 meeting.
Key Quotes:
- Members agreed the BoJ would continue to raise rates if its economic and price outlooks were to be realised.
- One member said it’s appropriate to pay close attention to the new U.S. policies and their impact on the global economy.
- One member said the BoJ would need to be particularly cautious when considering the timing of the next rate hike, as downside risks stemming from U.S. policies had rapidly heightened.
- One member said, even with heightened uncertainties, it did not warrant the BoJ to be always cautious, and the BoJ may face a situation where it should act decisively.
- One member said that it is necessary to make nimble adjustments to the degree of monetary accommodation if it is needed to avoid overheating of financial activities.
- One member said that during the phase of the next policy interest rate hike, underlying CPI inflation might be fairly close to 2%.
- One member said that it is not necessary at this point to make any major changes to the bond tapering plan when the BoJ reviews its current plan in June.
- That member also said the BoJ would, however, need to examine from a longer-term perspective the reduction plan for April 2026 onward.
- One member said that given that the US Federal Reserve was in no hurry to adjust policy stance, the BoJ policy could be more flexible.
Market Reaction:
The hawkish minutes come on top of trade-related uncertainties and offer some support to the safe-haven Japanese Yen (JPY), which, in turn, keeps the USD/JPY pair below the 144.00 mark.
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