BoJ Minutes: Members agree it was suitable for bank to keep increasing policy interest rate

The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook on Thursday, per the BoJ Minutes of the September meeting.   

Key quotes

Members concurred it was suitable for the bank to keep increasing the policy interest rate and modify the level of monetary easing.

One member said it was preferable for the bank to move the policy interest rate closer to the target relatively soon and maintain flexibility for quick adjustments in either direction.

One member said it was important to show the market BOJ's resolve to prevent upward price deviations with agile response to global economic conditions. 

Cabinet Office rep expects central bank to fulfill accountability on meeting decisions and closely examine cumulative effects of past rate policies. 

One member noted that if signs of rising price deviation appeared, the bank would need to speed up rate hikes. 

Cabinet office representative said BoJ may need to consider its estimates of neutral interest rate. 

One member said BoJ did not need hasty action but should set policy to prevent excessive, persistent inflation.

One member said bank should keep acting promptly without being too cautious. 

Cabinet office representative says important for BOJ to take proactive, appropriate steps amid excessive economic and market fluctuations. 

Many members expressed view it was difficult to pinpoint neutral rate level in advance. 

Many members said bank should modify policy while assessing changes in financial conditions including short-term interest rates and reaction to economic activity and prices. 

Ministry of Finance expects central bank to carefully assess impact of policy rate shift on economy and prices. 

Some members noted services prices rose steadily over recent years. 

Members say if trend accelerates further, underlying inflation could rise accordingly. 

One member noted that the current rate of CPI increase has largely met the price stability target. 

A different member said underlying cpi inflation has already reached a level generally aligned with the 2% target. 

Several members highlighted rising chances of CPI inflation increase from early autumn.

Market reaction to the BoJ Minutes 

At the time of writing, USD/JPY is down 0.03% on the day at 158.39.