In the Summary of Opinions at BoJ’s January 17-18 monetary policy meeting, it’s repeated noted that it’s important to continue with current monetary easing as well as yield curve control.
The modification of YCC at the December meeting was “aimed solely at making monetary easing more sustainable”. It is “necessary” to “take some time” to examine the effects of the change in YCC.
One member noted the “upward pressure” on long-term interest rates and the distortions on the yield curve. And, BoJ “should curb interest rate rises across the entire yield curve through measures”.
Regarding prices, CPI is expected to fall below 2% from fiscal 2023, and there is “still a long way to go to achieve the price stability target”.
But opinions were more upbeat as one noted that “momentum for wage hikes has grown, and it is possible that a certain degree of base pay increases will be realized”. But it still takes time for wages to see a “sustained increase”.
Firms’ stance has “shifted toward actively raising their selling prices” as seen in the outlook for output prices. Pace of rises in prices of both goods and services is “accelerating”. It’s possible that the significant price shocks since last week will “change the norm for prices”.
