BOJ June meeting minutes – members agreed must maintain current easy monetary policy

<p>The 'Summary' of the Bank of Japan June 2023 meeting was indicative of a change to come at the July meeting:</p><ul><li><a href="https://www.forexlive.com/centralbank/heads-up-folks-the-july-27-28-bank-of-japan-meeting-is-going-to-be-huge-ycc-pivot-20230626/" target="_self">Heads up folks, the July (27, 28) Bank of Japan meeting is going to be huge – YCC pivot</a></li><li><a href="https://www.forexlive.com/centralbank/more-from-the-boj-june-meeting-summary-one-member-called-for-early-revision-of-ycc-policy-20230626/" target="_self">More from the BOJ June meeting summary: One member called for early revision of YCC policy</a></li><li><a href="https://www.forexlive.com/centralbank/usdjpy-lower-after-the-boj-says-cpi-may-not-drop-below-2-20230626/" target="_self">USD/JPY lower after the BOJ says CPI may not drop below 2%</a></li><li><a href="https://www.forexlive.com/centralbank/boj-says-strong-chance-cpi-will-moderate-but-not-to-back-below-2-by-mid-fiscal-year-20230626/" target="_self">BOJ says strong chance CPI will moderate, but not to back below 2% by mid fiscal year</a></li></ul><ul><li><a href="https://www.forexlive.com/news/forexlive-asia-pacific-fx-news-wrap-boj-drops-hints-of-policy-changetweak-in-july-20230626/" target="_blank">BOJ drops hints of policy change/tweak in July</a></li></ul><p>While the change we got in July was minor, anything new from the Bank of Japan is significant.</p><p>Summary headlines via Reuters: </p><ul><li>
Members agreed BOJ must maintain current monetary easing to stably,
sustainably achieve price target</li><li>Many members said it
was appropriate to sustain monetary easing to support changes seen in
corporate wage, price-setting behaviour</li><li>One member said it
was premature to shift policy at a time companies becoming more keen
to boost wages, investment</li><li>A few members said
premature policy shift could mean BOJ will lose opportunity to
achieve price target</li><li>One member said the
chance BOJ is under-estimating sustainability of price rises cannot
be ruled out</li><li>One member said BOJ
must sustain monetary easing with an eye on side-effects of policy</li><li>Members shared the
view no need to make operational tweaks to YCC at this point</li></ul><ul><li>
One member said BOJ must avoid as much as possible a spike in
interest rates caused from prospects of exit from easy policy</li><li>One member said BOJ
must consider reviewing YCC at early stage to avoid big rate
volatility upon future exit from easy policy</li><li>A few members said
when BOJ were to review YCC, it must be mindful of risk that doing so
could be seen by markets as move toward monetary tightening</li></ul><ul><li>
Several members said companies continue to pass on higher import
costs, raising prices for longer period than expected</li><li>Several members said
domestic factors appear to be playing increasing role in pushing up
consumer inflation</li><li>One member said must
look at medium-, long-term inflation expectations closely as their
moves will be key to operating YCC</li><li>One member said
there was risk inflation might not fall back below 2%, remain
elevated above 2%</li><li>One member said
various indicators gauging trend inflation exceeding 2%, so there is
chance inflation may not fall back below 2%</li><li>Several members said
must be mindful of risk Japan's economy, inflation may come under
pressure from US, Chinese, overseas economic slowdown</li><li> Many members said
risks to inflation were skewed to upside for time being</li></ul><p>—</p><p>The Bank of Japan meeting Minutes are preceded many weeks in advance by the 'Summary' of the meeting. </p><ul><li>The "Summary of Opinions" provides a concise summary of the views expressed by Policy Board members during the meeting. It does not attribute opinions to individual members but offers a general overview of the views held by the board.</li><li>the Minutes are a more detailed record of the meeting and include an overview of economic and financial developments in Japan, the members' discussions and the reasons behind the decisions made. The minutes offer a more comprehensive account of the meeting, including the perspectives of individual members, which can provide more detailed insights into the policy outlook.</li></ul><p>Bank of Japan Governor Ueda </p>

This article was written by Eamonn Sheridan at www.forexlive.com.