BoJ Meeting Minutes: more of the same, no plans to act

The Bank of Japan (BoJ) is out with their Monetary Policy Meeting Minutes from the central bank's January discussion. The BoJ governor Haruhiku Kuroda along with his fellow board members are continuing to hold steady to their easy monetary policy stance until inflation reaches their 2% target, and market expectations of an early taper from the BoJ continue to dwindle.

Key highlights:

  • Momentum towards inflation targets is on pace, holding steady.
  • Majority of BoJ members agree the central bank should continue to pursue powerful monetary easing.
  • Some members voiced concerns about monitoring impact and side effects of policy, specifically within the financial system.
  • One board member expressed a need to pay attention to financial institution's 'lending attitudes' in a chronically low-interest rate environment.
  • A single member suggested incrementally adjusting rate levels if economic activity, inflation begin to improve.
  • Another member suggested additional easing may be required given the uncertainty of reaching inflation targets.
  • BoJ board noted it is undesirable to let the market speculate about BoJ taper potential.
  • The BoJ also noted that there is still room to use fiscal policy to overcome deflation.
  • Board needs to analyze the effects of BoJ ETF buying from "every angle".

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