REPEAT: MNI 5 THINGS: BOJ Apr Minutes: Slow CPI To Dim Outlook

Repeats Story Initially Transmitted at 05:34 GMT Jun 20/01:34 EST Jun 20

     TOKYO (MNI) - The Bank of Japan board agreed that the risk to the inflation

outlook is to the downside as a delayed rise in consumer prices is feared to

hamper the bank's efforts to turn around the deflationary mindset, the minutes

of the BOJ's April 26-27 policy meeting released Wednesday showed.

     The minutes didn't say whether the board discussed ways to stop inflation

expectations from fading. The board agreed the BOJ needs to persistently

maintain large-scale monetary easing to guide low inflation to its 2% target.

     Some of the nine board members continued to argue that the bank must watch

both the costs and benefits of the easing policy while one member said the bank

must check whether there are ways to reinforce the easing program in order to

ensure the path to anchoring 2% inflation.

     At the April meeting, the BOJ board decided in an 8-to-1 vote to maintain

its cautiously stimulative monetary easing stance under the yield curve control

framework while dropping its estimate on when it can achieve the increasingly

evasive 2% inflation target.

     The key points from the minutes:

     * On the price outlook, the board "agreed that there was a risk that a rise

in inflation expectations would lag behind if it took time for firms' stance to

shift toward raising wages and prices and inflation consequently remained

relatively sluggish."

     * "Some members pointed out that it was important to continue to conduct a

multifaceted monitoring and assessment of the positive impacts and side effects

of the current monetary easing policy -- including its effects on the

functioning of financial intermediation and the financial system."

     * One member argued that "in order to anchor inflation expectations at 2%,

it was desirable to continue further research and discussions as to whether

there were any measures to reinforce the commitment."

     The minutes didn't identify the member but the person seems to be Goushi

Kataoka, who dissented for the sixth straight meeting in April after taking

office in July last year. He continued to argue that additional easing would be

necessary to achieve the 2% inflation target at an early stage, but didn't

propose any specific policy action.

     * "Most members shared the recognition that, although it was necessary to

carefully examine the fact that firms' wage- and price-setting stance remained

cautious."

     * One member said "it was necessary to make efforts to give a clear

explanation on the meaning of 'exit and 'normalization' and gain understanding

among the public that the BOJ could respond flexibly depending on developments

in economic activity and prices as well as financial conditions."

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com