TOKYO (MNI) – Some Bank of Japan board members warned that it’s
uncertain whether the economy will remain stable after returning to what
they expect to be a moderate recovery track, the minutes of the BOJ’s
Jan. 24-25 policy-setting meeting released Friday showed.
The minutes said, “… some members expressed the view that, even
though the probability of the economy returning to a moderate recovery
path had increased, subsequent economic developments remained
uncertain.”
“A few members were of the opinion that attention should also be
paid to the possibility that a continued rise in international commodity
prices would have negative effects on Japanese firms’ profits through a
deterioration in the terms of trade.”
A surge in import costs will hurt Japan’s terms of trade and thus
its purchasing power, which in turn could dampen consumer spending and
increase downward pressure on the fragile economic recovery.
“Regarding European economies, many members said that risks had
relatively increased,” the minutes said.
BOJ board members noted that financial markets in Europe remain
unstable on concern over sovereign risks in the region.
After a two-day policy-setting meeting ended on Jan. 25, the BOJ’s
policy board voted unanimously to continue the bank’s very stimulative,
practically zero interest rate policy by maintaining the target for the
overnight lending rate among commercial banks at zero to 0.1%. The
policy remains unchanged after the following meeting on Feb. 14-15.
tokyo@marketnews.com
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