The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook on Wednesday, per the BoJ Minutes of the December meeting.
Key quotes
The BoJ maintained the uncollateralized overnight call rate around 0.25% as per its previous guideline.
Government bond purchases continued as planned, with monthly JGB purchases of ¥4.9 trillion.
The Japanese economy showed moderate recovery, supported by improving corporate profits and stable employment, though some weakness remains.
Inflation remains in the 2.0-2.5% range, supported by rising services prices and wage growth, though the impact of past import price increases has faded.
The BoJ reviewed its long-term monetary policy since the late 1990s, acknowledging both benefits and side effects of large-scale monetary easing.
Policymakers discussed the importance of sustainable inflation near 2%, emphasizing the need for cautious adjustments to monetary policy.
While some members pushed for an interest rate hike to 0.5%, the majority voted to keep rates unchanged at 0.25%, citing uncertainties in wage growth and global economic conditions.
The BoJ reaffirmed its cautious approach, stating that any future policy adjustments will depend on inflation trends, wage growth, and global economic risks.
The BoJ policy statement was unanimously approved, confirming continued monetary easing while monitoring inflation and financial stability.
Market reaction to the BoJ Minutes
At the time of writing, USD/JPY was up 0.04% on the day at 155.58.
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