BoJ Summary of Opinions: Member says uncertainty surrounding trade policy and impact remains large

The Bank of Japan (BoJ) published the Summary of Opinions from the July monetary policy meeting, with the key findings noted below.   

Key quotes

One member said BoJ likely to continue raising rates if economy, prices move in line with its forecast.
One member said given high uncertainty on whether BoJ's forecast materialises, it must judge outlook without preconception.
One member said no change to view underlying inflation will stall before re-accelerating despite Japan-US tariff agreement.
One member said uncertainty surrounding trade policy and its impact on economy remains large.
One member said BoJ must maintain current accommodative environment and support economy for now.
One member said US monetary policy, direction of FX moves may change sharply depending on US consumer inflation, labour data so must judge policy after looking at more data.
One member said need at least 2–3 months to gauge impact of US tariff policy.
One member said if US economy can weather tariff impact better than expected, downward pressure on Japan's economy may be small and allow BoJ to exit current wait-and-see mode by year-end at the earliest.
One member said BoJ must proceed with further rate hikes when chance opens up as Japan's policy rate is still below neutral.
One member said BoJ must raise rates in timely fashion to avoid being forced to hike rapidly, cause huge damage to Japan's economy.
One member said outlook for inflation expectations important for monetary policy.
One member said rising food, gasoline prices make people more sensitive to price moves, lead to higher inflation expectations.
One member said as Japan's underlying inflation approaches 2%, importance of actual inflation will likely increase.
One member said we are in a phase where BoJ must shift focus of its communication away from underlying inflation, towards actual inflation and its outlook, output gap and inflation expectations.
One member said Japan is seeing underlying inflation accelerate as price rises increasingly causing second-round effects.
One member said Japan-US trade agreement is very big progress, reduces uncertainty for Japan's economy.
One member said likelihood of Japan achieving BoJ's baseline scenario has heightened.
One member said must be vigilant to chance negative impact of tariffs on Japan's exports could start to appear.
One member said there is chance global economy may overshoot expectations due to expansionary fiscal, monetary policies in Europe, U.S., China and emerging economies.
One member said inflation has remained well above BOJ’s 2% target for more than 3 years and inflation expectations have reached 2%, worried whether Japan could see further rises.
Cabinet Office Rep: Japan’s economy recovering moderately but need to be mindful of risk from continued price rises.

Market reaction  

Following the BoJ’s Summary of Opinions, the USD/JPY pair is down 0.03% on the day to trade at 147.10 as of writing.