The Bank of Japan's Minutes of the Monetary Policy Meeting in October concluding on 28 2021 has been released.
Key notes
- Members agreed no hesitation to ease policy further if necessary.
- Members discussed the impact of the weak yen on the economy.
- A few members said weak yen exerts positive effects on japan's economy as a whole even though the effects of pushing up exports are lower than before.
- One member said chances are low that rising inflation would weigh on Japan's economy as a whole so we must maintain powerful monetary easing.
- A few members said FX markets and asset prices are vital channels for monetary policy but they themselves are not the target.
- A few members said must patiently continue ultra-easy policy given inflation undershooting the 2% price target.
- One member said no reason to rectify monetary easing as the inflation target has not been met regardless of other countries' policy moves.
- One member said further cooerperation needed between fiscal and monetary policy.
Meanwhile, USD/JPY is trying to break higher:
The US dollar has been under pressure in recent trade in a risk-on environment, although the yen has been an underperformer as well.
The minutes are unlikely to impact the yen as traders have positioned for the holidays following the central bank conclusions and sentiment is unlikely to shift.
About the BoJ Minutes
The Bank of Japan publishes a study of economic movements in Japan after the actual meeting. These meetings are held to review economic developments inside and outside of Japan and indicate a sign of new fiscal policy. Any changes in this report tend to affect the JPY volatility. Generally speaking, if the BoJ minutes show a hawkish outlook, that is seen as positive (or bullish) for the JPY, while a dovish outlook is seen as negative (or bearish).
