BOJ Minutes - Appropriate to keep powerful easing, inflation expectations stop declining

Minutes of the Bank of Japan (BOJ) monetary policy meeting held on Dec 20 and 21 show-

• Most members believe it was appropriate for the Bank to persistently pursue powerful monetary easing under the current guideline for market operations.
• Many members said there was still a long way to go to achieve the price stability target of 2 percent, it was necessary to maintain the current highly accommodative financial conditions.
• Indicators of medium- to 15 long-term inflation expectations had stopped declining, with some indicators showing an uptrend, and such inflation expectations were likely to rise steadily as further price rises came to be observed widely.
• One member said that, considering the risk of weaker growth in Japan's economic activity and prices due to a possible economic downturn in the United States and the consumption tax hike in Japan that was scheduled for 2019, the Bank should aim to achieve a situation in which the inflation rate would reach 2 percent in fiscal 2018 and overshoot 2 percent in fiscal 2019.