TOKYO (MNI) – Some members of the Bank of Japan’s policy making
board expressed concern at their Feb. 14-15 meeting about the impact
that high and rising international commodity prices could have on the
global economic recovery, the minutes of that meeting released on
Thursday showed.

“Some members raised the possibility that, depending on future
developments in international commodity prices, the sustained growth of
the global economy might be hampered if such developments led to greater
fluctuations in economic activity and prices in various countries,” the
minutes said.

“With regard to emerging economies in particular, a few members
expressed the view that attention should be paid to the possibility of a
substantial rise in inflation rates adversely affecting these economies
and thereby causing capital outflows and political unrest.”

After this two-day policy-setting meeting ended Feb. 15, the BOJ’s
policy board voted unanimously to continue the bank’s very stimulative,
practically zero interest rate policy, maintaining the target for the
overnight call loan rate among commercial banks at zero to 0.1%.

The decision was widely expected as the economy continues moving
gradually toward a moderate recovery path but remains mired in mild
deflation.

The BOJ board has said that it will maintain its accommodative
policy stance until price stability is in sight.

Governor Masaaki Shirakawa and other board members have pledged to
closely monitor the outlook for Japan’s economy and prices and to take
policy actions in a timely and appropriate manner, as necessary.

In February, the BOJ board slightly upgraded its economic
assessment from the previous month, saying, “Japan’s economy is
gradually emerging from the current deceleration phase.”

“As the growth rate of the global economy has started increasing
again led by emerging and commodity-exporting economies, Japan’s exports
and production are showing signs of resuming an uptrend.”

These economic comments were made before the massive earthquake and
tsunamis that hit Japan on March 11, which severely damaging Japanese
production infrastructure and disrupted supply lines. The full extent
of the negative impact on Japanese and global growth is not yet clear.

tokyo@marketnews.com
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