BOJ Policymakers Weighed Potential Rate Increase: Minutes

Tokyo, Nov. 5 (Jiji Press)–Bank of Japan policymakers in September held an in-depth discussion about the advisability of raising interest rates, minutes from the central bank’s monetary policy meeting released on Wednesday showed. The minutes of the Sept. 18-19 meeting showed that a member of the BOJ’s Policy Board said that the central bank may be able to return to a monetary policy stance of raising interest rates, as the BOJ’s 2 pct price stability target has been “more or less achieved.” At the meeting, the Policy Board voted 7-2 to hold the BOJ’s policy interest rate at around 0.5 pct. Board members Hajime Takata and Naoki Tamura proposed raising the rate to around 0.75 pct, but the proposal was defeated by a majority vote. The minutes showed that a member of the board said that “the conditions needed for raising the policy interest rate were gradually being met.” Another member suggested, “It might be time to consider raising the policy interest rate again, given that it had been more than six months since the last rate hike.” Some members sounded cautious about raising rates. A member said, “It would not be too late even if the bank made decisions after assessing a little more hard data.” A member said the BOJ “should, at this point, maintain accommodative financial conditions with the current interest rate level and thereby firmly support the economy.” The BOJ at the meeting also voted to unload its holdings of exchange-traded funds, a process that may take more than 100 years to complete. A board member said that the long process “would instead be reassuring, and thereby mitigate the impact on the markets,” according to the minutes. END [Copyright The Jiji Press, Ltd.]