MNI BRIEF: BOJ April Minutes Show Concern on Business Debt

The Bank of Japan board agreed that the central bank needs to pay attention to whether businesses will pay their debts and if the amount of credit will return to a normal level, according to the minutes of the April 26-27 policy meeting released Wednesday showed.

One member pointed out that, "with regard to the relationship between financial system stability and price stability, attention should also be paid to the one in which a decline in prices led to an increase in the effective burden of debt, thereby adversely affecting the financial system."

The minutes said: "It was necessary to pay close attention to whether debt repayment would proceed along with recovery in corporate profits and the amount of credit extended by financial institutions would return to a level consistent with real economic activity."

The minutes also showed that some members expressed the view that, if the rise in U.S. long-term interest rates accelerated, the risk of capital outflows from emerging economies warranted vigilance.

"In addition, some members said that it was worth paying attention to the effects that the U.S.-China tension would have on the global economy and financial markets," the minutes said.