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--BOJ Publishes Summary Opinions from Jan 20/21 Meeting
TOKYO (MNI) - A review of the Bank of Japan's monetary policy was becoming
a necessity as muted growth and stubbornly low inflation continued, one board
member emphasized at the Jan. 20/21 meeting, the summary of opinions released
Another member cited a possibility that continuing the negative interest
rate policy would lower households' and firms' inflation expectations.
The overall dovish bent of the Board was summed up by a different member,
who said that "since the possibility that the inflation momentum will be lost
continues to warrant attention, it is appropriate to maintain a policy stance of
being titled toward monetary accommodation."
The BOJ left policy unchanged at the meeting, with little sign Japan's
economy has deviated from its baseline recovery scenario, although broad
downside risks to economic activity and prices remain.
It also upgraded its median forecasts for real economic growth rates in
this fiscal year, fiscal 2020 and fiscal 2021, all boosted by the government's
latest economic stimulus measures.
The Bank's medium-term inflation forecasts were left broadly unchanged from
the three months ago, with no noticeable pick-up inflation expectations.
Other key points from the summary of opinions:
-- "Since downside risks to economic activity and prices are still
significant, it is necessary to be prepared for a possible economic downturn as
one of the risk scenarios. It will become more important to enhance cooperation
with the government in terms of fiscal and growth policies."
-- "Given that quite a long time has passed since the BOJ introduced a
powerful monetary easing policy, it is becoming more important to continuously
make efforts to enhance the sustainability of the policy while weighing up the
cumulative effects and side effects."
--"It is necessary to closely monitor the business conditions of regional
financial institutions as well as their efforts made regarding corporate
--"Economic indicators in Japan since last October have not been
--Developments in consumption-related indicators since the consumption tax
hike show that recovery has been weak. Although there has been improvement in
households' sentiment indicators, "its pace has been slow compared to that of
the tax hike conducted in fiscal 2014."
--"It is appropriate to assess the impact of the output gap on prices in
terms of the 'area' calculated by multiplying the degree of the positive gap by
--"Although a virtuous cycle from income to spending has supported price
rises, in order to maintain this cycle, it is necessary to continue raising
wages as well as improve corporate profits to encourage such continuous wage
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