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Needle Still Points North


Bearish Correction Still In Play

     TOKYO (MNI) - Heightened uncertainties over the outlook for the economy and
prices prompted the Bank of Japan to clarify the continuation of its easy policy
and the forward guidance for rates at the April 24-25 policy-setting meeting,
the summary of opinions at the meeting released Friday showed.
     One member also emphasized the need for the BOJ to strengthen the easy
policy at the meeting but the view wasn't shared by others.
     The preliminary minutes also indicated that the discussion on the
side-effects of a prolonged easy policy hasn't developed from previous meetings.
     At the meeting, the BOJ kept monetary policy unchanged, with Japan's
economy still expanding moderately despite persisting downside risks to both
activity and prices.
     But the BOJ clarified its forward guidance for policy rates, saying the BOJ
intends to maintain the current extremely low levels of short- and long-term
interest rates for an extended period of time, "at least through around spring
2020," taking into account uncertainties regarding economic activity and prices
including developments in overseas economies and the effects of the scheduled
consumption tax hike.
     On forward guidance, board member Yutaka Harada, a former government
economist, dissented, arguing that it was appropriate to further clarify its
relationship with the price stability target. 
     Goushi Kataoka, a former private-sector economist, was also opposed. He
said that it was necessary for the BOJ to make a commitment to take additional
easing measures if it revised its medium- to long-term inflation expectations
     Other key points from the summary of opinions:
     -- "In order to strengthen public confidence in continuing with powerful
monetary easing, it is appropriate to clarify forward guidance for policy rates,
such as through making clear the specific period for which extremely low levels
of interest rates will be maintained."
     -- "It is appropriate to consider revising forward guidance for policy
rates, for example, that uncertainties regarding overseas economies have
heightened compared to the time of its introduction."
     --"It is likely to still take time to achieve 2% inflation, it is important
to make clearer the bank's stance of continue with the current powerful monetary
     -- "It is important to conduct monetary policy, taking into account
developments in economic activity more than before" as employment and wages lag
behind other indicators of economic activity.
     -- "Given that the side effects of monetary easing accumulate as economic
activity undergoes a phase shift, it is necessary to strengthen monetary easing
at this point toward achieving the price stability target at the earliest
possible time."
     -- "As some leading indicators have given rise to slightly concerns, it is
appropriate to make a somewhat cautious assessment compared to the previous
     -- "Whether declines in exports and production will affect employment and
event consumption is important. It is expected to take some time for the
decrease in production to lead to that in consumption. However, there also is a
risk that the scheduled consumption tax hike will bring forward the decline in
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