BOJ members thinks bank should stay with quantitative easing

According to a collection of opinions from the board members at the latest rate review on Monday, Japan’s central bank policy makers stated that the bank needs to stay with quantitative easing as the inflation level is still under the 2 percent price target.

A board member of the Bank of Japan stated that yen strength and the fall in stocks could affect consumer spending and capital expenditure, this could further delay reaching the inflation target.

During the March policy meeting, monetary policies were kept unchanged and speculations of an early pullout from quantitative easing was cast aside by the bank’s chief.

The Bank of Japan issues a bullet point summary of the board members’ opinions during its policy meetings about one week after they are held. The views are kept anonymous. Following this report, the bank would release a comprehensive minute of the debate several weeks later.

According to one Bank of Japan member, the bank is not yet at a point wherein it can consider normalizing policy. However, the BOJ should clarify that normalizing policy is a different strategy and is not the same as tightening policy.

This comment emphasizes the lack of communication the Bank of Japan is currently dealing with since subdued inflation compels the bank to stick with large stimulus in spite of the increasing costs of the policy.

The yen JPY= was up about 6 percent against the dollar while the Nikkei share benchmark shed approximately 5 so far within the year, partly because of doubts regarding the course of the U.S. monetary policy.


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