Bank of Japan board members saw the need to maintain ultra-easy monetary policy for now, with some calling for a deeper debate on a future exit from massive stimulus, a summary of opinions at the central bank’s December 18–19 meeting showed.
“To avoid the risk of high prices damaging consumption and undermining the chance of achieving our price target, we should not miss the opportunity to normalize monetary policy,” the opinion said.
Some members expressed their belief that there is no need to hurry in implementing this change.
One member argued that the BOJ has “sufficient leeway” to determine whether a virtuous wage-inflation cycle has been achieved.
Meanwhile, BOJ Governor Kazuo Ueda recently stated that the likelihood of Japan’s economy getting out of the low-inflation environment and achieving the price stability target is gradually rising, though the possibility is still not sufficiently high.
Despite some views indicating progress in reaching the 2% goal, there is still concern over potential consequences if the bank has to abruptly implement stricter policies, the board will likely consider changing its monetary policy.
“It’s better to be quick and effective than slow and detailed,” noted one committee member, emphasizing the importance of not making rushed decisions.
In addition, another member highlighted the momentum in wage increases, stating that it is stronger compared to last year. This suggests a sense of positivity and hopefulness for the achievement of a positive cycle between wages and prices.
The BOJ holds its next policy meeting on Jan. 22 and 23.
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