BOJ Summary of Opinions: Must maintain YCC until needed to stably, sustainably hit price goal

Reuters conveyed the Bank of Japan (BOJ) Summary of Opinions for the latest monetary policy meeting as Tokyo opens on Wednesday.

Among the key discussions at the monetary policy meeting, the Yield Curve Control (YCC) gained major attention as it triggered Yen’s rally.

Key quotes

BOJ must maintain easy policy as Japan in critical phase in hitting price goal.

Japan showing signs of wage rises, positive economic cycle but appropriate to maintain easy policy for time being.

Bond market function worsening which, if continued, would disrupt positive effect of BOJ's easy policy.

Corporate bond spread widening as bond market function deteriorates, sour investors' sentiment.

Appropriate to widen BOJ's yield band due to concern over negative impact on bond market from YCC.

Widening of yield band is not shift from loose monetary policy, aimed at making current stimulus more sustainable.

BOJ must widen trade band to address declining market functions but even so, no change to fact powerful monetary easing continues.

BOJ must widen yield band to address distortion in 10-year jgb pricing but this is not a step toward exit from ultra-easy policy.

By pledging to flexibly buy bonds, BOJ would enhance sustainability of its monetary easing.

BOJ must humbly scrutinise how much widening of yield band would improve market function.

When BOJ eyes exit from easy policy, it must check to see whether market players are prepared for such move, where risks could lie when interest rates rise.

Appropriate to maintain easy policy now but at some point, BOJ must conduct examination of its policy to gauge balance of pros and cons of current measures.

Tweaking BOJ's price target would be inappropriate as it would dilute its policy goal and make its monetary policy effect insufficient.

Government representative said understand today's debated step is aimed at conducting more sustainable monetary easing.

Government representative said hope BOJ continues to work closely with govt, guide policy appropriately with eye on economic, price, financial developments.

Inflationary momentum may be increasing in Japan as prices rising not just for goods but services.

Consumer price conditions approaching conditions seen before Japan slid into deflation.

There is still some distance toward sustainably, stably hitting price target.

Year-on-year rise in import prices clearly narrowed in November as commodity prices falling from peak levels.

There is good chance wages will rise significantly due to robust corporate profits.

More firms becoming keen on raising wages as job market tightens, which could help push up inflation sustainably.

USD/JPY grinds higher

Following that BOJ Summary of Opinions, the USD/JPY pair defends the previous day’s positive performance around the one-week high, picking up bids to 133.50 at the latest, during the four-day uptrend.