BoJ View Summary: YCC, Negative Rates, Other Mass Stimulus Tools Have Done Their Role

The Bank of Japan (BoJ) has published the summary of views from its monetary policy meeting on March 18 and 19, the main conclusions of which are set out below.

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“One member said that Yield curve control (YCC), negative rates and other massive stimulus tools have done their job“.

“One member said the BoJ should guide monetary policy using the short-term rate as the main policy means, in accordance with economic, price and financial developments.”

“One of the members stated that it is possible to switch to “normal” monetary easing without causing short-term shocksand that can have a positive impact on the economy from a medium and long-term perspective.”

“One of the members said that the probability that the change in monetary policy will cause great volatility in the markets is small“

“One of the members said that the future stance of monetary policy is very important so that the BoJ can slowly but steadily proceed with policy normalization.”

“One member said it was appropriate to give some leeway in the BoJ's bond-buying operation.”

“One member said that It is appropriate to review monetary policy after confirming that smaller companies are able to raise wages sufficiently“

“One member said that ending YCC and negative rate simultaneously could cause disruption to long-term rates and in the financial environment.”

“One member said that changing monetary policy now could delay achieving BoJ price target“.

“One member said it was important to use the expected results of the BoJ policy review in future policy guidelines.”

“One member stated that Japan's low natural interest rate and the delayed effect of monetary policy could be behind the slow recovery of the economy.”

“One member said the virtuous cycle between wages and prices has become more robust.”

“One member said that the mechanism underlying the price development is very likely to be consistent with the price target.”