BoJ debated whether to boost stimulus

12 November, 2019 12:00 AM printer

TOKYO: Bank of Japan policymakers debated whether extra easing measures were needed to hit the central bank’s inflation target at its last policy meeting, a summary of opinions showed on Monday, as heightened risks threatened a fragile economic recovery.

Some in the BOJ’s nine-member board insisted on the need to communicate to markets the central bank would maintain loose monetary policy given the time need to accelerate inflation to its 2 per cent price goal, the summary of the Oct 30-31 meeting showed, report agencies. One of the members said additional easing measures would be needed “without hesitation” if momentum toward achieving the inflation target falters.

“In the current situation where risks are skewed to the downside, the Bank should continue to examine whether additional monetary easing will be necessary,” another board member was quoted as saying in the summary.

At the October meeting, the BOJ kept monetary policy steady but introduced new forward guidance to indicate more clearly its readiness to cut rates if needed, underscoring its concern over simmering overseas risks.

In its policy statement last month, the BOJ said it expected short- and long-term interest rates to stay at their present or lower levels given the possibility efforts toward achieving the elusive price target stall.

Board member Goushi Kataoka dissented on the decision to change forward guidance, saying such momentum had already been lost.