JP: BoJ MPB Minutes

Mon Jul 20 18:50:00 CDT 2015

The Bank of Japan published the minutes for its June 18 and 19 meeting. At that time, they left policy unchanged. According to the minutes, the monetary policy board agreed that prices were rising in the longer term.
As for the outlook for the economy, members concurred that it was likely to continue recovering moderately. Some members noted that exports and production, both of which had continued to increase, had recently been lacking momentum somewhat due mainly to the effects of a temporary slowdown in overseas economies, and thus the economic growth rate was likely to exhibit a temporary decline for the April-June quarter. However, these members expressed the recognition that the growth rate was likely to increase thereafter as the virtuous cycle from income to spending continued.

Many members shared the recognition that quantitative and qualitative monetary easing (QQE) had been exerting its intended effects. These members agreed that the underlying trend in inflation, which was determined by the output gap and medium- to long-term inflation expectations, would continue to improve. Many members expressed the recognition that, since the introduction of QQE -- while nominal interest rates had been stable at low levels -- inflation expectations had been rising on the whole from a somewhat longer-term perspective, and therefore real interest rates had been declining. These members then commented that such developments had been underpinning firms' and households' spending.

The BoJ announced a new framework for their monetary policy meetings with the changes taking effect January 1, 2016. The changes include reducing the number of monetary policy board meetings from 14 to 8 and releasing an Outlook for Economic Activity and Prices on a quarterly basis. They will also now release each policy board member's forecasts for and risk assessments of the economy and prices and will release a summary document. With the reduction to eight meetings a year, the BoJ joins the Federal Reserve, the ECB who reduced its meeting frequency this year and the Bank of England intends to reduce its meeting schedule as well.

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.