JP: BoJ MPB Minutes

Sun Feb 22 17:50:00 CST 2015

The Bank of Japan published the minutes of its January 20 to 21 monetary policy meeting. At the meeting the BoJ extended the duration of two lending schemes and expanded the size of one of them to Y10 trillion from Y7 trillion.

the BoJ is optimistic that its aggressive monetary policy is making "steady progress" in getting rid of deflation. The latest data shows the Bank of Japan is struggling to come anywhere close to its inflation target. Core consumer prices were up just 0.5 percent in December -- the most sluggish year-to-year pace since June 2013. The BoJ acknowledged weak core inflation but board members said this was a result of collapsing oil prices rather than a failure of policy. They estimated that lower oil prices would subtract between 0.7 and 0.8 percentage points from inflation in fiscal 2015. Nonetheless, inflation expectations show "steady progress in the conversion of the deflationary mindset despite the further drop in crude oil prices and the decline in the actual inflation rate."

Some members expressed the view that, as the decline in crude oil prices caused income transfers from oil producing countries to oil consuming countries, which had a higher propensity to spend. The net effect of the decline would be positive in terms of the global economy as a whole.

Minutes follow monetary policy board meetings with a four to five week lag. For example, minutes released on June 19 were for the meeting held on May 21 and May 22.

Investors who want a more detailed description of Bank of Japan opinions will generally read the minutes closely. The MPB may issue a statement after its monthly meeting but the minutes will be much more detailed. In particular they will reveal who voted for and against the Committee's decisions and provide a more detailed description of the MPB's thinking. As such, the minutes are a market mover as analysts parse each word looking for clues to future policy.

Once Every 3-4 weeks.