MNI BRIEF: More Time Needed To Review YCC - BOJ Minutes

Bank of Japan board members agreed not to revise yield curve control conduct, while one board member noted global financial market turmoil warranted a wait-and-see approach in regards to any review, despite the programme's distortionary impact on bond markets, according to the recently released minutes of the April 27-28 meeting

The policymakers largely shared the view that “long-term interest rates had been at around zero percent, in line with the guideline for market operations, as the Bank had devised various ways of conducting market operations,” the minutes showed. “Members pointed out that distortions on the yield curve were dissolving; they agreed that there was no need to revise the conduct of yield curve control.”

As for the monetary policy review, one member said it would be useful to "effectively continue with monetary easing.”

“In order to make the review objective and reasonable, it should be conducted from a broad perspective, without bearing a specific policy change in mind,” the member said.

A different member noted Japan's experience since the late 1990s did not necessarily coincide with what had been inferred from various economic theories, such as the relationships between unemployment and wage growth, as well as between money and inflation.