JP: BoJ MPB Minutes

Mon Dec 25 17:50:00 CST 2017

The Bank of Japan has published the minutes of the meeting of the Monetary Policy Board held October 30 and 31 At this meeting, members of the MPB left policy settings unchanged, keeping the short-term rate for excess reserves at minus 0.1 percent and retaining the target level for the 10-year government bond yield at around zero percent. Members also concluded that maintaining the BoJ's purchases of government bonds at an annual pace of Y80 trillion would be appropriate to meet their 10-year yield target. Members voted 8-1 in favour of the decision to keep policy settings unchanged.

Consistent with the statement published immediately after the October meeting, the minutes note that officials considered the Japanese economy had been "expanding moderately" and will likely continue to do so. Accommodative monetary policy and fiscal stimulus was expected to drive a "virtuous cycle" from income to spending, with stronger global growth also expected to support export growth. Officials downgraded their near-term inflation forecasts at the October meeting, mainly reflecting the impact of lower mobile phone charges, but retained their assessment that price pressures would pick up gradually. Based on these revised inflation forecasts, the BoJ still expected to meet its inflation target sometime "around" the fiscal year starting April 2019.

The policy settings retained at the October meeting were also left unchanged at the BoJ's subsequent policy meeting, held last week. Officials' assessment of the growth and inflation outlook were also little changed at this meeting. Speaking at the post-meeting press conference, BoJ Governor Haruhiko Kuroda noted that he expects the economy's steady recovery to continue next year. He also argued that consumers are gradually accepting price increases but left open the possibility of loosening policy further if momentum towards the inflation target weakens.

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.