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Bank of Japan January minutes show concern on bond buying pace

Published 02/22/2015, 07:53 PM
Updated 02/22/2015, 07:55 PM
© Reuters. BoJ Jan minutes released

Investing.com - Some Bank of Japan board members said the pace of massive Japanese government bond buying may need to stop before reaching a 2% sustained inflation goal, according to minutes published of the January meeting on Monday.

Board members also said falling oil prices should be reflected in inflation expectations, but that the underlying trend of moving from a deflation mindset is progressing steadily.

It was the first time that board members had referred to the feasibility of continuing the key part of its nearly two-year-old quantitative and qualitative easing (QQE).

"Some members - noting that interest rates had recently been declining further under QQE - said that, when examining risks, it was necessary to closely monitor factors such as the effects this would have on financial institutions' business conditions and the risk of a buildup of financial imbalances," the minutes said.

"A few of these members noted that the feasibility of continuing asset purchases into the future warranted attention, even though it seemed technically possible to continue such purchases for some time."

The 10-year JGB yield fell to a record low of 0.195% on Jan. 20.

At its January meeting, the BoJ board decided by an 8 to 1 vote to leave the bank's policy target unchanged, as largely expected, while revising down its inflation forecast sharply to 1% for the next fiscal year amid falling energy prices.

Board member Takahide Kiuchi remained opposed to the Oct. 31 move to ease further through more bond purchases.


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