BoJ’s Summary of Opinions: YCC, negative rate, and other massive stimulus tools have accomplished their roles

Bank of Japan (BoJ) published the Summary of Opinions from its March monetary policy meeting on March 18 and 19, with the key findings noted below.

Key quotes

“One member said YCC, negative rate, and other massive stimulus tools have accomplished their roles.”

“One member said BoJ must guide monetary policy using short-term rate as main policy means, in accordance to economic, price, and financial developments.”

“One member said shifting to 'normal' monetary easing is possible without causing short-term shocks, may have a positive impact on the economy in medium-, long-term perspective.”

“One member said chance of policy shift causing big market volatility is small.”

“One member said future policy guidance very important so that BoJ can slowly but steadily proceed with policy normalization.”

“One member said appropriate to give some room for allowance in BoJ's bond buying operation.”

“One member said appropriate to revise policy after confirming that smaller firms are able to sufficiently hike wages.”

“One member said ending YCC and negative rate simultaneously could cause disruption in long-term rate, financial environment.”

“One member said changing policy now could delay achievement of BoJ's price target.”

“One member said important to make use of expected outcome from BoJ's policy review in future policy guidance.”

“One member said Japan's low natural rate of interest, lagged effect of monetary policy may be behind slow recovery pace of economy.”

“One member said virtuous cycle between wages and prices has become more solid.”

“One member said highly likely that mechanism behind price developments will be consistent with price target.”

Market reaction

Following the BoJ’s Summary of Opinions, the USD/JPY pair is losing 0.02% on the day to trade at 151.30, as of writing.