The Summary of Opinions from BoJ’s meeting on September 19 and 20 acknowledged that while outlook for Japan’s economic activity and inflation will guide future changes in monetary accommodation, policymakers remain vigilant about developments in overseas economies, particularly the US, and their potential impact on Japan’s financial markets and price stability.
With Yen’s depreciation retracing and import price pressures easing, one view noted that BoJ has “enough time to assess the situation”. Another opinion stressed that Japan’s economy is not at risk of “falling behind the curve” if interest rates are not raised swiftly. BoJ should not raise interest rate when “financial and capital markets are unstable”.
Another member suggested that while price stability has not yet been achieved and uncertainties persist, a shift to “full-fledged monetary tightening” would be undesirable at this stage.
However, a contrasting opinion within the BoJ indicated that if economic conditions remain stable and the outlook is confirmed, it would be preferable for the bank to raise rates “without taking too much time.”
This divergence highlights the ongoing debate within BoJ about the timing of future rate hikes.
