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MNI (London)
     TOKYO (MNI) - China's stimulus measure are expected to boost their economy,
most Bank of Japan board members expect, although some expressed uncertainty
over their impact, the minutes of the March 14-15 policy-setting meeting
released Wednesday showed.
     Most members expressed concern over firms' cautious wage- price setting
stance and households' caution toward price rises, which will impede a smooth
pick-up in both consumer prices and inflation expectations.
     At the meeting, the BOJ left monetary policy unchanged, voting 7-2 to
continue with yield curve control and the asset purchases, as Japan's economy is
expanding moderately, despite heightened downside risks.
     The minutes showed policymakers didn't discuss additional easy policy at
the March meeting.
     The BOJ maintained their overall economic assessment, saying "Japan's
economy is expanding moderately, with a virtuous cycle from income to spending
operating," adding that the economy "is likely to continue its moderate
     However, in the wake of weaker data, the BOJ lowered its assessment on
exports and industrial production as well as overseas economies, reflecting a
slowing in China and Europe.
     Other key points from the minutes:
     --"Many members said that the pace of growth in the (Chinese) economy was
highly likely to recover through the second half of 2019, as the effects of
stimulus measures that authorities already had been proceeding with would
gradually materialize and a pick-up in IT-related demand was anticipated."
     --Some members "pointed out that, in a situation where the corporate sector
had been facing a high level of debt outstanding, implementing stimulus measures
was a challenging policy conduct for authorities, and the there were
considerable uncertainties as to when and to what extend the measures' effect
would emerge."
     --"A few members expressed the recognition that the BOJ should be more
vigilant than before about whether the decreases in exports and production would
spread to employment and domestic demand, thereby weakening the inflation
     --One member said, "It was important that the macroeconomic policy
framework -- a policy mix of monetary and fiscal policies -- continue to be
sustained," but didn't elaborate.
     --Many members shared the view "amid heightening uncertainties associated
with the outlook for the global economy, market participants had become more
sensitive to messages conveyed by central banks, and thus the BOJ also needed to
give due consideration to its strategy for communication to the public."
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
[TOPICS: MMJBJ$,M$A$$$,M$J$$$]
MNI London Bureau | +44 203-865-3812 |