TOKYO (MNI) – Two of the nine board members at the Bank of Japan
saw the need for further monetary easing in the future at the May 19-20
policy meeting but both said the economic climate didn’t warrant
immediate action, the minutes of the meeting released Friday showed.
One member noted it was “important to consider the appropriate
timing to implement additional measures by continuing to examine the
transmission mechanisms and side effects of each monetary easing measure
already taken,” the minutes said.
Deputy Governor Kiyohiko Nishimura didn’t make any proposals for an
additional stimulus measure at the May meeting. At the previous meeting
on April 28, he had called for raising the size of the BOJ’s
asset-buying program to Y15 trillion from the current Y10 trillion. His
proposal was voted down 8-to-1.
An unnamed board member told the May meeting that “the opinion that
the need for additional monetary easing was potentially strong, but
there was no particular advantage to increase the amount of the program
at this stage.”
The member noted that “judging from indicators related to the
outlook for economic activity and information obtained from business
contacts, a further deterioration in sentiment, which had previously
been feared, did not appear to have materialized,” the minutes said.
At the May and June meetings, the BOJ’s policy board voted
unanimously, as widely expected, to continue the bank’s very
stimulative, practically zero interest rate policy by maintaining the
target for the overnight call loan rate among commercial banks at zero
to 0.1%.
After the May meeting, the BOJ repeated its view given in its
semi-annual Outlook Report issued on April 28, saying, “for the time
being, attention should be paid to the downside risks to economic
activity, especially the possible effects of the disaster.”
tokyo@marketnews.com
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