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21 Feb 2014
BoJ Minutes: QE not limited to a 2 year frame
FXStreet (Bali) - The Minutes from the Monetary Policy Meeting held by the Bank of Japan on Jan 22 has been published, with no major surprises to report, as widely expected.
One of the main comments the minutes emphasized was to raise awareness over QE not limited to a 2 year frame should the economy not perform as previously anticipated. One member said need to make sure explanation of policy does not weaken commitment to time frame.
On the economy: "With regard to the outlook, Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the front-loaded increase and subsequent decline in demand prior to and after the consumption tax hike. The year-on-year rate of increase in the CPI, excluding the direct effects of the consumption tax hike, is likely to be around 1¼ percent for some time."
On CPI projections: "Compared with the forecasts presented in the October 2013 Outlook for Economic Activity and Prices, the growth rate and year-on-year rate of increase in the CPI will likely be broadly in line with the October forecasts."
On QE: "The Bank will continue with quantitative and qualitative monetary easing, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate."
Such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan's economy to overcome the deflation that has lasted for nearly 15 years."
One of the main comments the minutes emphasized was to raise awareness over QE not limited to a 2 year frame should the economy not perform as previously anticipated. One member said need to make sure explanation of policy does not weaken commitment to time frame.
On the economy: "With regard to the outlook, Japan's economy is expected to continue a moderate recovery as a trend, while it will be affected by the front-loaded increase and subsequent decline in demand prior to and after the consumption tax hike. The year-on-year rate of increase in the CPI, excluding the direct effects of the consumption tax hike, is likely to be around 1¼ percent for some time."
On CPI projections: "Compared with the forecasts presented in the October 2013 Outlook for Economic Activity and Prices, the growth rate and year-on-year rate of increase in the CPI will likely be broadly in line with the October forecasts."
On QE: "The Bank will continue with quantitative and qualitative monetary easing, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate."
Such conduct of monetary policy will support the positive movements in economic activity and financial markets, contribute to a rise in inflation expectations, and lead Japan's economy to overcome the deflation that has lasted for nearly 15 years."