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TOKYO (MNI) - The summary of opinions expressed at the Bank of Japan's
April 26-27 policy meeting released Thursday showed that one board member said
the BOJ would "flexibly" respond to the side-effects of prolonged large-scale
monetary easing and that it must explain such an action would be different from
exiting from the easing program.
At the meeting, the BOJ board decided in an 8-to-1 vote to maintain its
monetary easing stance under the yield curve control framework it adopted in
September 2016. No change in monetary policy was widely expected. The BOJ
believes large monetary stimulus is still needed to guide low inflation around
1% toward its 2% price stability target.
The board also decided to stop publishing its estimate on when it can
achieve the 2% inflation target in order to "dispel the misunderstanding" among
some market participants that a delayed timing would prompt the bank to conduct
additional easing, BOJ Governor Haruhiko Kuroda told reporters after the
The key points from the summary of opinions:
-- "The BOJ persistently continues with the current monetary easing" and
"It is necessary to make efforts to give a clear explanation on the meaning of
exit and normalization, and gain understanding among the public that the BOJ can
respond flexibly depending on developments in economic activity and prices as
well as financial conditions," one board member said.
This means that the BOJ must stand ready to adjust the aggressive easing to
minimize its growing side-effects and the that it must communicate closely with
the public and markets to prevent market participants from interpreting such a
move as an exit from the easing program that was launched in 2013.
-- "It is necessary to clearly communicate that the BOJ's commitment to
achieving the price stability target of 2% at the earliest possible time has not
changed at all, even when the description on the projected timing of reaching
around 2% inflation has been reviewed."
-- "In order to continue with powerful monetary easing, the BOJ needs to
constantly consider enhancing its sustainability while aiming to gain consensus
among the public on the necessity of the price stability target."
-- "It seems to take some time to reach 2%" as the inflation expectation
formation is adaptive.
-- "Although the tightening supply-demand conditions in capital stock and
the labor market have led to firms' positive stances to some extent, their
stances shifting toward raising prices are not strong enough to push up
inflation to 2%."
-- "The purchases of risky assets including exchange-traded funds (ETFs)
are carried out as part of the policy package aiming at achieving the price
stability target, and their policy effects and the possible side effects should
continue to be examined from every angle."
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