MNI POLICY: BOJ Opinions: Some On Board See Policy Review Need

The Bank of Japan needs to review its monetary policy strategy as the ongoing coronavirus pandemic is hampering hitting current price targets, according to some board members, the Summary of Opinions from the Sept 16/17 meeting show.

One member called for a "comprehensive" review, the opinions, published Tuesday, show.

The BOJ left monetary policy unchanged at the meeting, seeing Japan's economy improving after the sharp contraction in Q2, although downside risks remain, with many members of the policy board pointing to the continuation of ensuring financing reaches companies as the correct policy for now..

Covid-19 was writ large through the opinions, with one member suggesting a twin view on policy -- one to deal with containment of the virus and one to help boost activity, with another underlining the importance of continued cooperation with the government in dealing with the fallout.

The was acknowledgement from one board member that the BOJ was continuing with is 2% price target, seen as the "global standard", while another noted that the Federal; Reserve's new monetary policy strategy was similar to their own "average over the business cycle."

INFLATION

With inflation likely to "negative for the time being", there is a concern that, households' and firms' will see sentiment impaired further, and the "timing of regaining inflation momentum could be affected accordingly."

Although Japan's economy had picked up, it was recovering from a very "severe situation" and that was weighing on both consumer and corporate spending and the recover would likely be "slower than that observed at the time of the previous meeting," one member said. His worries were echoed by another member, who said the unexpected decline in wages could further hamper demand and sentiment ahead.