Following the latest Consumer Price Index from Japan for December, we now have the Bank of Japan Minutes.
BoJ December Monetary Policy Meeting – Full Minutes
- Risks to the economy and inflation Warrant attention.
- A few members pointed out that households' short-term inflation expectations had declined since October due to the consumption tax hike.
- One member said BoJ might need to ramp up stimulus to meet tax hike impact like it did half a year after previous sales tax hike in 2014.
- A few members said it was necessary to examine carefully the side effects of monetary easing.
- One member said BoJ should consistently scrutinize its policy framework as discussions about reviewing policy frameworks have become active at other central banks.
- One member said introduction of inflation range target, as proposed by IMF, could be seen as weakening BoJs commitment toward achieving price target.
- Some members said it was a matter of concern that leading indicators of CAPEX such as machinery orders had been showing some weakness recently.
- A few members said need to pay close attention to how corporate profits affect winter bonuses, taking into account expected decline in profits at manufacturers.
- One member said attention should be paid to whether recent rises in interest rates could hurt the effect of BoJ's stimulus policies.
The Bank of Japan publishes a study of economic movements in Japan after the actual meeting. These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility. Generally speaking, if the BoJ minutes show a hawkish outlook, that is seen as positive (or bullish) for the JPY, while a dovish outlook is seen as negative (or bearish).
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