The Bank of Japan (BoJ) board members addressed the future of monetary policy on Monday, following the release of the minutes from their June meeting.
Key points from the discussion include:
Several board members expressed concerns about the inflationary risks stemming from rising import prices due to the recent depreciation of the yen.
One member highlighted the potential for cost-push inflation to drive underlying inflation higher if it leads to increased inflation expectations and wage growth.
Another member noted that the accelerated pass-through of higher labor costs could impact consumer inflation.
There was a discussion on the necessity for the BoJ to potentially adjust its monetary easing stance, as renewed cost-push pressures might cause inflation to exceed target levels.
One board member emphasized the need for the BoJ to raise interest rates at an opportune time without delay.
Another member advised that rate hikes should be implemented only after a clear rebound in inflation is observed and inflation expectations are confirmed to be rising.
The members collectively agreed that the recent weakness of the yen is contributing to increased inflation and that careful guidance of monetary policy is essential.
Lastly, one member cautioned that the BoJ’s monetary policy should remain unaffected by short-term fluctuations in foreign exchange rates.
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