Bank of Japan Summary of Opinions from the December Monetary Policy meeting. Full text.
- One member said must patiently maintain monetary easing
- One member said must confirm sustainable, stable achievement of price target is foreseen in order to end negative rate, YCC
- One member said must scrutinise wage, price moves under YCC given strong upward pressure on prices likely stabilised
- One member said even if next spring's wage hikes are considerably higher than expected, risk that this will cause underlying inflation to significantly exceed 2% is small
- One member said we are not in situation where we would fall behind the curve in raising rates, even if we decided to wait after seeing wage talk outcomes next spring
I don't want to read too much into all this 'one member' headline commentary. But, if I did then I'd be doubtful of any pivot from the Bank before April, perhaps even later.
USD/JPY is up a few ticks, circa 142.46 as I update, from142.35 or so just before the release.
More:
- One member said steps taken so far have lowered likelihood of distortion in yield curve, so BOJ has sufficient leeway to determine whether price target will be achieved via virtuous wage-price cycle
- One member said while risk of inflation becoming too high and requiring rapid monetary tightening is small, cost incurred if this risk materialises would be significant
- One member said timing of normalising monetary policy is getting closer
- One member said BOJ should not miss opportunity to normalise policy to avoid risk of high prices damaging consumption, achievement of price target
- One member said looking ahead toward future exit from current policy, BOJ must examine benefit, cost of YCC and negative rate policy
- One member said close attention should be paid to consumption moves for time being but given improvement in economy, treatment of YCC, risky asset buying should be considered thereafter
- One member said the BOJ's forward guidance implies that it will allow some tweaks to YCC if achievement of price target likely to be in sight after implementing such tweaks
- One member said it is important for the BOJ to continue deepening discussion on issues such as timing of exit from current policy, appropriate pace of rate hike thereafter
- One member said from perspective of maintaining confidence in its ability to conduct monetary policy in exit phase, it is important for BOJ to provide communication on central banks' balance sheet
- One member said momentum towards wage hikes heightening compared with last year
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Bank of Japan Governor Ueda spoke earlier this week, on 25 December:
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From the day:
