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BOJ Jan meeting 'Summary of Opinions' published

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The BOJ January meeting "Summary of Opinions", a new communications initiative from the Bank of Japan, and edited by Bank of Japan Governor Kuroda, has been published. There are conflicting opinions in the summary, given that the latest policy decision by the BOJ to adopt negative rates saw a 5-4 vote.

    Main headlines

    Necessary to preempt manifestation of risk that global market volatility hurts business sentiment

    BOJ should reinforce QQE and increase available options for further easing in future by implementing additional measures in order to sustain credibility for monetary policy

    In light of experiences in some European countries, BOJ has gained enough knowledge about effects of negative interest rates

    Adopting QQE with negative interest rate will enable BOJ to demonstrate there is plenty of room for pursuing additional easing

    Although risks are tilted to downside due to volatile developments in global financial markets, an immediate policy response is not necessary in this situation
    Introduction of negative interest rate may give an impression to the market BOJ's monetary policy is approaching its limit

    Don't think this is time to drastically change monetary policy as limited room for private-sector borrowing rates to decline further

    BOJ should refrain from acting at this moment as this policy step is only appropriate in crisis situation, risks increasing financial system instability

    Maintaining current pace of increase in monetary base and introducing negative interest rate at same time lacks logical consistency

    I am concerned that introduction of a negative interest rate could lead to a competition with central banks in other countries to lower rates deeper into negative territory

    Ministry of Finance representative said BOJ's step necessary to achieve price target, expect it to thoroughly explain its policy management
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