MNI BRIEF: BOJ Minutes: Concern On Impact Of Supply Disruptions

A few Bank of Japan board members voiced concern over the risk that prolonged supply-chain disruptions would lead to postponement of capital investment and a deterioration in corporate financing, the minutes of the September 21-22 meeting released on Tuesday showed.

One member said, "supply-side constrains seemed to be taking longer to resolve than initially anticipated by firms and that, with the wide range of supporting industries in Japan's automobile industry, there was also a risk that the adverse effect of these constrains could spread more than expected," the minutes showed.

Another member warned, "if firms were unable to pass on cost increases stemming from a rise in commodity prices to their production prices, expenditure on business fixed investment and labor costs would be curbed, and households facing stagnant income in turn would consume less." The same member added, "a vicious cycle needed to be changed to achieve sustainable inflation."