MNI POLICY: BOJ Opinions: One Member Calls For More Easing

--Overall BOJ Board Saw Need For Steady Continuation Of Policy

     TOKYO (MNI) - One Bank of Japan board member emphasized the need of further

easy policy in order to prevent the economy from falling into deflation,

according to the summary of opinions from the June 15/16 meeting, published

Wednesday.

     Another member said, "In the conduct of economic measures, it is necessary

first of all to minimize the risk of deflation taking hold."

     However, the remaining members didn't see the need of more easing,

emphasizing the need to implement measures already in place.

     The BOJ left monetary policy unchanged at the meeting, as widely expected,

seeing recently introduced lending programs to facilitate financing for smaller

firms' working smoothly, with bank lending growing.

     Other key points from the summary of opinions:

     MONETARY POLICY

     --"Falling into deflation amid a situation where inflation expectations are

not anchored to 2% could be a considerable obstacle to achieving the price

stability target. Thus, considering this risk, it is necessary to conduct

additional easing at this point."

     ECONOMY

     --"It is still unclear when the spread of COVID-19 will subside on a global

basis, as the spread is continuing in emerging economies in particular. It seems

inevitable that the negative impact on the global economy, including Japan, will

become prolonged without effective vaccines and medicines."

     --"A delay in economic recovery brings about deterioration in firms'

financial conditions and volatility in financial and capital markets. In turn,

such a delay entails a risk of concern over financial system stability. Thus, it

is necessary to pay due attention to future economic developments."

     --PRICES

     --"In a situation where a gradual shift of phase from providing emergency

support to promoting recovery materializes, the economic stimulus effects of the

current monetary policy should be reexamined." "Close attention should be paid

to future price developments, taking into consideration the possibility that

both the natural rate of interest and inflation expectations will decline."

     --"The employment and income situation, which had supported the virtuous

cycle that led to price rises, has shown some weakness. As a risk scenario,

there is concern that the adaptive formation of inflation expectations might be

affected if the CPI remains low for a prolonged period."

     --"It is necessary to pay attention to the risk that, if an economic

recovery is delayed due to a second wave of COVID-19, this may lead to a decline

in prices through adjustments in labor and capital stock."

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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