BoJ Minutes: Members firmly focus on upside inflation risk

The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook on Thursday, per the BoJ Minutes of the June meeting.   

Key quotes

Most members agreed economy progressing as baseline, risks persist inflation could exceed 2% target. 

One member noted FX factors are driving import prices higher, impacting smaller companies. 

One member said Japan's real interest rate is unusually low by global standards, must be adjusted given inflation upside risks. 

One member said moving BOJ’s policy rate closer to neutral would support economic, price stability over time. 

Members agreed it was suitable for Bank of Japan to keep raising rates. 

Some members stress BOJ should uphold guidance to continue raising rates if economy, prices align with projections. 

One member urges moving policy rate closer to neutral promptly. 

One member said central bank must increase rates about once every few months. 

Some members said decision to pause bond taper was to prevent market instability, not to respond to fiscal policy. 

One member emphasized the importance of gradually shrinking BOJ's balance sheet. 

One member said central bank must eventually pursue suitable reserve level considering economic and financial developments.