
BOJ Members Saw No Need for New Yield Control Tweaks – September Minutes, According to Reuters
By Tetsushi Kajimoto
TOKYO – Most members of the Bank of Japan’s board saw no necessity for further adjustments to yield curve control and agreed on maintaining ongoing monetary easing to achieve targets for inflation and wage growth, according to the minutes from their September meeting released on Monday.
These remarks were made prior to the BOJ’s subsequent meeting in October, where the bank loosened its stance on long-term interest rates by modifying its bond yield control, marking a small step toward unwinding its controversial monetary stimulus.
During the meeting held on September 21-22, the BOJ reaffirmed its commitment to easy monetary policies and its intention to support the economy until inflation consistently reaches the 2% target, indicating no urgency to phase out its extensive stimulus program.
Board members expressed that long-term interest rates were aligning with the bank’s market operation policy following its decision in July to adopt a more flexible approach to yield control, as highlighted in the September meeting minutes.
At that time, U.S. long-term rates had not yet surged, suggesting that the BOJ’s recent measures were not anticipated until more recently, noted Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities.
During the September meeting, the BOJ adopted a more optimistic outlook regarding price growth; however, board members remained cautious about any changes to policy, Muguruma added.
Several members indicated that any discussion on eliminating negative interest rates and yield control would need to be considered in conjunction with the successful achievement of the BOJ’s 2% inflation target.