MNI POLICY: BOJ Minutes: Board Members Pondered More Easing

     TOKYO (MNI) - Several Bank of Japan Board members considered further policy

easing amid concerns about momentum in achieving price stability targets,

according to the September BOJ Board minutes released on Wednesday.

     "Members shared the view that, while slowdown in overseas economies

continued to be observed and their downside risks seems to be increasing, it was

becoming necessary to pay close attention to the possibility that the momentum

toward achieving the price stability target would be lost," the minutes from the

meeting held on September 18-19 revealed.

     Several members were of the view that, "it was important to make

assessments while taking into consideration the results of the BOJ Tankan and

the reports that would be made at the meeting of general managers of the BOJ's

branches, together with other indicators, and that the BOJ should not have any

preconceptions at this point regarding its assessment."

     However, concerns over the outlook for the price momentum, and the need for

more easing were allayed by the outcome of the Tankan survey, which showed solid

capital investment plans.

     At the September meeting, the BOJ left monetary policy unchanged by a vote

of 7-2, but vowed to re-examine economic and price developments at the next

policy meeting in October.

     "The BOJ will reexamine economic and price developments at the next MPM,

when it updates the outlook for economic activity and prices," the statement

said.

     Other key points from the minutes:

     --"One member expressed the recognition that it was important for the BOJ

to communicate with emphasis that it had not reached an impasse on monetary

policy measures in terms of short- or long-term interest rates, quantity, or

quality, and that any kinds of measures were possible at all times."

     --"A different member noted that, given the lessons of unconventional

monetary policy tools implemented so far at home and abroad, it was important to

communicate widely the effectiveness of policy measures."

     "One member said that, given the concern that the delay in the recovery in

overseas economies would have a negative impact on Japan's economic activity and

prices, it was necessary to consider desirable policy responses while paying

attention to the side effects."

     --"A different member pointed out that there was some possibility that the

momentum toward achieving the price stability target would be lost, and that the

BOJ should examine whether additional easing measures would be necessary."

     --Another member said, "there was relatively large room for monetary easing

among yields in the short- and medium-term zone, and lowering the short-term

policy interest rate was appropriate to additional easing measures."

     TOKYO (MNI) - A few Bank of Japan board members were worried over the risk

that the momentum toward achieving the price stability target will be lost and

the board members saw the need of considering additional easy policy, the

minutes of the September 18-19 policy-setting meeting released on Wednesday

showed.

     "Members shared the view that, while slowdown in overseas economies

continued to be observed and their downside risks seems to be increasing, it was

becoming necessary to pay close attention to the possibility that the momentum

toward achieving the price stability target would be lost," the minutes showed.

     A few members said, "it was important to make assessments while taking into

consideration the results of the BOJ Tankan and the reports that would be made

at the meeting of general managers of the BOJ's branches, together with other

indicators, and that the BOJ should not have any preconceptions at this point

regarding its assessment."

     However, the concern over the outlook for the price momentum and the

necessity of more easing were eased by the outcome of the Tankan, which showed

solid capital investment plans, and of the branch managers' meeting ahead of the

October meeting.

     At the September, the BOJ left monetary policy unchanged, but vowed to

re-examine economic and price developments at the next policy meeting in

October.

     "Slowdown in overseas economies have continued to be observed and their

downside risks seem to be increasing, the BOJ judges that it is becoming

necessary to pay closer attention to the possibility that the momentum toward

achieving the price stability target will be lost," a policy statement said,

following the Board's 7-to-2 vote.

     "The BOJ will reexamine economic and price developments at the next MPM,

when it updates the outlook for economic activity and prices," it added.

     Other key points from the minutes:

     --"One member expressed the recognition that it was important for the BOJ

to communicate with emphasis that it had not reached an impasse on monetary

policy measures in terms of short- or long-term interest rates, quantity, or

quality, and that any kinds of measures were possible at all times."

     --"A different member noted that, given the lessons of unconventional

monetary policy tools implemented so far at home and abroad, it was important to

communicate widely the effectiveness of policy measures."

     "One member said that, given the concern that the delay in the recovery in

overseas economies would have a negative impact on Japan's economic activity and

prices, it was necessary to consider desirable policy responses while paying

attention to the side effects."

     --"A different member pointed out that there was some possibility that the

momentum toward achieving the price stability target would be lost, and that the

BOJ should examine whether additional easing measures would be necessary."

     --Another member said, "there was relatively large room for monetary easing

among yields in the short- and medium-term zone, and lowering the short-term

policy interest rate was appropriate to additional easing measures."

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

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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