Bank of Japan April 2023 meeting Minutes
Headlines via Reuters:
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A few members pointed out that past price increases in commodities
and raw materials continued to be passed on to consumer prices with a
time lag - A different member
said that, in addition to a pass-through of higher raw material
prices, an increasing number of factors had contributed to firms
raising their selling prices - One member expressed
the view that high wage increases could lead, for example, to an
improvement in consumer sentiment - A different member
expressed the view that it was uncertain whether pent-up demand would
materialize to an extent where it would make up for private
consumption restrained during the pandemic - One member expressed
the view that, with labor shortages intensifying, high wage increases
could be expected in 2024
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One member said firms that had raised the starting salaries for new
graduates in fiscal 2023 seemed to be planning to raise wages to some
extent in fiscal 2024 - One member expressed
the opinion that wage growth in 2023 seemed to be partly attributable
to temporary factors - One member said
signs of a virtuous cycle between prices and wages had started to be
observed
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A few members said in order for CPI inflation to rise again toward 2%
after decelerating, it was necessary for wage developments, firms’
growth expectations, and medium- to long-term inflation expectations
to improve - Some members said
while firms’ price-setting stance had been changing, Japan’s CPI inflation was rather unlikely to remain elevated
-
Some members said it was appropriate for the bank to continue with
the current monetary easing due to difficulty of assessing
sustainability of future wage hikes, developments in inflation
expectations - A few members said
it was necessary for the bank to continue to firmly support the
momentum for wage hikes by maintaining monetary easing so that the
nominal wage growth rate would rise sufficiently relative to prices - One member said
while achievement of price goal was coming into sight, it was
appropriate that the bank continue with monetary easing for the time
being since there were both upside and downside risks - One member said
signs of a virtuous cycle between wages and prices had started to
emerge in Japan’s economy - The member continued
that it was necessary for the bank to appropriately assess underlying
developments in economic activity and prices so that its policy
responses would not fall behind - A different member
said the BOJ needed to avoid abrupt changes in interest rates, humbly
monitor price and wage developments, and make responses at the right
moment
On YCC:
- Members pointed out
that distortions on the yield curve were dissolving, agreed that
there was no need to revise the conduct of yield curve control - One member said the BOJ could consider revising the conduct of YCC, but it was
appropriate to wait and see a little longer in light of the situation
in global financial markets - This member added that attention was
warranted on upcoming bond market survey results -
One member said
BOJ should be careful to ensure that revision to the forward guidance
would not be viewed as its willingness to raise the policy interest
rates
On relations between the government and Bank of Japan:
- The Ministry of Finance representative said Prime Minister Kishida
and Governor Ueda recently shared the recognition that, with
extremely high uncertainties, the government and the bank would
nimbly conduct policies with eye on economic, price and financial
developments - MoF Rep said Kishida, Ueda agreed at this point,
there was no need to change joint statement between govt, BOJ
Bolding above is mine, there are a few useful snippets in there. The last one, on the joint statement, was a very hot topic at the time. The speculation was that a change to the statement, to allow the BOJ more flexibility to dial back ultra-easy policy, was imminent. Nope, it was not.
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Full text is here: Minutes of the
Monetary Policy Meeting on April 27 and 28, 2023
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The Minutes are preceded many weeks in advance by the ‘Summary’ of the meeting. 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.
For the April meeting the post is here:
and the full text is here:
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The April meeting was a bit of a fizzer:
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