JP: BoJ MPB Minutes

Tue May 26 18:50:00 CDT 2015

The Bank of Japan published the minutes from the monetary policy board's April 30 meeting. By April 2015 the BoJ had hoped to hit a 2 percent inflation target set two years earlier. Instead, a global collapse in oil prices beginning last summer chipped away at inflation gains each month and brought them back to zero.

At this meeting the BoJ shifted its inflation target to the first half of fiscal 2016 (between April and September of next year). The minutes reveal that some board members think the new target is too optimistic, too. A few "expressed the recognition that the rate of increase would not reach around 2 percent during the projection period."

There was also some dissent from the prevailing view of a steady recovery. According to the minutes, "Some members expressed the view that improvement in private consumption had somewhat lacked momentum." The majority of members, however, see underlying trends picking up "steadily", the effects of crude oil's decline dissipating and the output gap improving to about zero percent.

With regard to medium- to long-term inflation expectations, members shared the view that these appeared to be rising on the whole from a somewhat longer-term perspective despite the decline in the observed inflation rate.

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.