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Bank of Japan minutes show lending expansion not seen as more easing

Published 03/13/2014, 10:05 PM
Updated 03/13/2014, 10:07 PM
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Investing.com - Several Bank of Japan board members said the the decision in February to expand pro-growth lending tools should not be considered additional monetary easing, the minutes of the meeting released Friday showed.

Last month the nine-member board decided unanimously to double the scale of the two programs to help boost bank lending and extend the application period for these facilities by one year.

"Many members said that the bank had been stating that, in mplementing quantitative and qualitative monetary easing, it would examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate," the minutes said.

"These members continued that the revisions discussed at this meeting should not be taken as such 'adjustments' to achieving the price stability target of 2% as expected.

On inflation, one member pointed to the possibility that "the effect of the depreciation of the yen on prices had become larger."

Japan's core CPI has been rising above 1% on year in recent months, backed by higher import costs for processed food and energy as well as markups in TVs and other consumer electronics.

The minutes also showed that the board agreed that a moderate recovery remains underway, but that the April sales tax hike may be a speed bump.

"A few members expressed the view that future economic developments depended on whether an increase in exports and business fixed investment could offset the reversal decline in private consumption following the consumption tax hike," the minutes said.

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