BOJ July Minutes: Slow Wage, Price Hikes Risk to 2% CPI

     TOKYO (MNI) - Bank of Japan board members cautioned that a further delay in

the inflation outlook amid slow wage and retail price hikes would dampen actual

consumer price rises, noting risks to growth and inflation were skewed to the

downside, the minutes of the bank's July 19-20 policy meeting released Tuesday

showed.

     Regarding the longer-term price outlook, members concurred 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."

     On monetary policy conduct, the minutes said "most members shared the

recognition that, although it was necessary to carefully examine the fact that

firms' wage- and price-setting stance remained cautious, the momentum toward

achieving the 2% stability target was being maintained."

     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% 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 board

continued to revise up slightly 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.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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