The Bank of Japan (BoJ) board members shared their perspectives on the future of monetary policy in the minutes from their January meeting, released on Tuesday.
Key highlights from the minutes included most members acknowledging that the likelihood of achieving the BoJ’s economic outlook had increased. Several members noted that real interest rates were expected to remain significantly negative even following any rate hikes. One member pointed out that if underlying inflation were to rise, the BoJ would need to gradually increase policy interest rates accordingly.
Additionally, one board member stressed the necessity of adjusting monetary accommodation to prevent excessive yen depreciation and an overheating financial market. Another member suggested that a policy interest rate around 1% could be appropriate in the latter half of fiscal 2025.
Market reaction to the minutes was muted, with USD/JPY rising by 0.02% to 150.74 at the time of writing.
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