Summary of the Bank of Japan meeting points
The raise in policy interest rates.
- It expressed its intention to continue raising policy interest rates if the outlook for the economy and prices materializes.
- The current real interest rates are at an extremely low level, so a raise is deemed necessary.
The instability of the financial capital markets.
- The future of the American economy and other factors remains uncertain, keeping the financial markets unstable.
- It stated that it will closely monitor this situation with a high level of tension and assess its impact on the Japanese economy and prices.
The reduction in the risk of upward pressure on prices.
- Due to the movement of the exchange rate, the risk of upward pressure on prices from the weakening of the yen since the beginning of the year has decreased.
Indicated a view that there is 'sufficient time' for policy determination.
Overseas Economic Analysis
Stated that the uncertainty of the American economy is a factor in market fluctuations, and carefully analyzing its impact.
Emphasized the need to determine whether the 'soft landing' scenario of the American economy will be realized.
Recognition of the underlying inflation rate.
Evaluated that the Japanese economy is generally progressing as expected.
Stated that the opacity of the American economy is making overall judgment difficult.
Communication with the financial markets
Recognizing criticism that the Bank of Japan's thinking was not sufficiently conveyed due to the volatile market.
Indicated the intention to communicate information carefully and frequently in the future.
Communication with the new administration.
Avoided commenting on the candidates' remarks on monetary policy related to the Liberal Democratic Party leadership election, but emphasized the need for sufficient communication with the new administration.
Attention to wage trends.
Pay attention to whether wage increases will continue, especially post-autumn trends.
Highlighted the raise of minimum wage and consumer trends as important factors.
Regarding the rate hike in October.
- Regarding the rate hike at the October monetary policy meeting, it was avoided to make a clear statement and it was stated that the judgment will be made based on the data.
- Outlook for the American economy
- Concerning the American economy, it is seen as a possibility of a soft landing, but recent data has been slightly weak, indicating that the risks are increasing.
- Regarding the rate hike for the remainder of the year
- The outlook for the Japanese economy is progressing smoothly, but due to the continued uncertainty of the American economy, it was stated that the situation of an immediate rate hike will not occur.
- BOJ's decision to maintain its policy
- A unanimous decision was made to maintain the policy interest rate at 0.25%.
- Governor Ueda reaffirmed the position that there is time flexibility for the rate hike.
Market reaction
- Following the President's remarks, the view that there is no rush to raise interest rates further has spread, and the yen exchange rate has fallen to the mid-143 yen per dollar level.
- The Nikkei average futures rose, supported by a weak yen.
Adjustment of economic outlook
- The economy maintains a gentle recovery trend, and personal consumption is upwardly revised from the previous view as a "gentle increasing trend".
Attention to the impact of exchange rates
- Emphasizing that exchange rate fluctuations have a significant impact on prices and pointing out that if the yen strengthens, there is a risk of downward pressure on prices.
Evaluation of wage trends
- It was stated that the rise in nominal wages due to the spring labor negotiations has no impact on corporate earnings and will continue to be closely watched.
- Rise in consumer price index.
- The consumer price index in August rose by 2.8% compared to the previous year, influenced by the rise in energy and food prices.
- Cautious remarks.
- Demonstrating a cautious stance on interest rate hikes, emphasizing that it will not be implemented immediately.
- It expressed its intention to continue raising policy interest rates if the outlook for the economy and prices materializes.
- The current real interest rates are at an extremely low level, so a raise is deemed necessary.
The instability of the financial capital markets.
- The future of the American economy and other factors remains uncertain, keeping the financial markets unstable.
- It stated that it will closely monitor this situation with a high level of tension and assess its impact on the Japanese economy and prices.
The reduction in the risk of upward pressure on prices.
- Due to the movement of the exchange rate, the risk of upward pressure on prices from the weakening of the yen since the beginning of the year has decreased.
Indicated a view that there is 'sufficient time' for policy determination.
Overseas Economic Analysis
Stated that the uncertainty of the American economy is a factor in market fluctuations, and carefully analyzing its impact.
Emphasized the need to determine whether the 'soft landing' scenario of the American economy will be realized.
Recognition of the underlying inflation rate.
Evaluated that the Japanese economy is generally progressing as expected.
Stated that the opacity of the American economy is making overall judgment difficult.
Communication with the financial markets
Recognizing criticism that the Bank of Japan's thinking was not sufficiently conveyed due to the volatile market.
Indicated the intention to communicate information carefully and frequently in the future.
Communication with the new administration.
Avoided commenting on the candidates' remarks on monetary policy related to the Liberal Democratic Party leadership election, but emphasized the need for sufficient communication with the new administration.
Attention to wage trends.
Pay attention to whether wage increases will continue, especially post-autumn trends.
Highlighted the raise of minimum wage and consumer trends as important factors.
Regarding the rate hike in October.
- Regarding the rate hike at the October monetary policy meeting, it was avoided to make a clear statement and it was stated that the judgment will be made based on the data.
- Outlook for the American economy
- Concerning the American economy, it is seen as a possibility of a soft landing, but recent data has been slightly weak, indicating that the risks are increasing.
- Regarding the rate hike for the remainder of the year
- The outlook for the Japanese economy is progressing smoothly, but due to the continued uncertainty of the American economy, it was stated that the situation of an immediate rate hike will not occur.
- BOJ's decision to maintain its policy
- A unanimous decision was made to maintain the policy interest rate at 0.25%.
- Governor Ueda reaffirmed the position that there is time flexibility for the rate hike.
Market reaction
- Following the President's remarks, the view that there is no rush to raise interest rates further has spread, and the yen exchange rate has fallen to the mid-143 yen per dollar level.
- The Nikkei average futures rose, supported by a weak yen.
Adjustment of economic outlook
- The economy maintains a gentle recovery trend, and personal consumption is upwardly revised from the previous view as a "gentle increasing trend".
Attention to the impact of exchange rates
- Emphasizing that exchange rate fluctuations have a significant impact on prices and pointing out that if the yen strengthens, there is a risk of downward pressure on prices.
Evaluation of wage trends
- It was stated that the rise in nominal wages due to the spring labor negotiations has no impact on corporate earnings and will continue to be closely watched.
- Rise in consumer price index.
- The consumer price index in August rose by 2.8% compared to the previous year, influenced by the rise in energy and food prices.
- Cautious remarks.
- Demonstrating a cautious stance on interest rate hikes, emphasizing that it will not be implemented immediately.
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