DJ: BOJ Policy Board Member Says Rise In Prices Without Econ Improvement Undesirable

Tuesday, August 14, 2012

TOKYO–One member of the Bank of Japan’s policy board said the BOJ should maintain an appropriate pace of monetary easing as a rise in prices without economic improvement would be “undesirable,” according to the minutes of the board’s July 11-12 meeting.”It is necessary to continue to pay attention to the optimal pace of monetary easing to achieve a rise in prices in balance with the increase in corporate profits and wages,” the minutes of the meeting, released Tuesday, showed.

A few members said at the meeting, however, that the BOJ should stand ready to take appropriate action without precluding any options, since Japan’s economy could be adversely affected by risks stemming from the European debt crisis.

At the meeting, the policy board decided to maintain the overall size of the BOJ’s asset purchase program–its main tool for monetary easing amid near zero interest rates–at 70 trillion yen.

But it tweaked the program by increasing purchases of short-term treasury bills by Y5 trillion in exchange for reducing unpopular fixed-rate loans by the same amount to help meet its target.

The BOJ also decided to remove the minimum bidding yield of 0.1% for buying of treasury bills and commercial paper, a move that enables financial firms to sell the bonds to the BOJ at higher prices.


About Uy Do

Banking System Analyst, former NTT data Global Marketing Dept Senior Analyst, Banking System Risk Specialist, HR Specialist
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