TOKYO (MNI) – Some Bank of Japan board members warned that downside
risks to Japan’s recovery from deflation and the March earthquake
disaster appeared to be rising, according the minutes of the Oct. 6-7
BOJ policy meeting released on Tuesday.
“Some members added that downside risks to economic activity and
prices could have increased to some extent compared with the time of the
previous meeting (on Sept. 6-7), mainly reflecting the fact that global
financial markets had become unstable due to the worsening of the
sovereign debt problems in Europe,” the minutes said.
“Some members expressed the view that it was important for the BOJ
to continue to take actions in an appropriate manner, as necessary.”
“One of these members added that furthering monetary easing might
become necessary depending on future developments, a view this member
maintained from the previous meeting,” the minutes said.
The BOJ’s policy board stood pat at the Oct. 6-7 meeting as it
continued to monitor the effects of its “bold” monetary easing conducted
on Aug. 4 in order to stop the yen’s rapid rise from hurting Japan’s
export-led recovery.
The BOJ board has voted unanimously to continue the bank’s very
stimulative, practically zero interest rate policy by maintaining the
target for the overnight call loan rate among commercial banks at zero
to 0.1%, as expected.
But at its latest meeting on Oct. 27, the BOJ also decided to ease
credit further by increasing the amount of its financial asset-buying
program to Y55 trillion from Y50 trillion, as the yen hit record highs
against the dollar.
The bank warned that overseas economies will show slower growth for
now, citing the lingering sovereign debt crisis in Europe and the long
process of reducing household debt in the U.S.
tokyo@marketnews.com
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