JP: BoJ MPB Minutes

Mon Sep 25 18:50:00 CDT 2017

The Bank of Japan published the minutes of the July 19-20 monetary policy board. MPB members cautioned that a further delay in the inflation outlook amid slow wage and retail price increases would dampen actual higher consumer prices. They noted that the risks to growth and inflation were skewed to the downside. Members agreed that "there was a risk that a rise in inflation expectations would lag further behind if it took time for firms' stance to shift toward raising wages and prices and inflation consequently remained relatively sluggish." Due to this and other factors including the uncertainty over global growth, the board "shared the recognition that risks to Japan's economic activity and prices were skewed to the downside."

At the July meeting, the BoJ board decided to leave its monetary policy unchanged in a seven-to-two vote, retaining the yield curve control target it adopted in September last year, while pushing back its estimate for achieving its 2 percent inflation target by a year until "around fiscal 2019." It was the sixth delay since the bank began aggressive easing in April 2013.

In its quarterly Outlook Report released after the meeting, the BoJ MPB upwardly revised up its economic growth forecast for the next two years on firmer global demand but revised down its projection for inflation through fiscal 2019 as the pace of increases in wages and retail prices remains slow.

The Bank of Japan publishes minutes following its monetary policy board meetings with a four or five week lag. The minutes expand upon the BoJ's post-meeting announcement.

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.