BOJ Summary – one monetary policy board member suggested the neutral rate is at least 1%

Summary of the Bank of Japan’s views at the monetary policy meeting on July 30-31

• Many members see economic activity and prices developing in line with the BOJ’s expectations.
• Some see scope for raising “very low” interest rates, pointing to negative real interest rates at 25-year lows.
• Opinions divided on timing – some want more data, others ready to move now
• Agreement on the need for a gradual approach to avoid a rapid rise in interest rates
• Members are looking for a neutral rate of “at least around 1%” as a medium-term target.
• Plans to reduce Japanese government bond purchases are seen as strengthening market function, not tightening it
• Close monitoring of Japanese government bond market needed as BOJ cuts purchases
• Government representatives stress need for clear communication on political changes
• Ongoing debate about the sustainability of the inflation/wage growth cycle

Opinions suggest the Bank of Japan is laying the groundwork for further monetary policy normalization, but remains divided on the exact timing and pace.

Of course, that was all then, and this is it now:

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Full text:

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I posted this information earlier, but in case you missed it:

The Bank of Japan issues the “Summary of Opinions” after each monetary policy meeting. It serves as a record of the discussions and opinions of Policy Board members on various economic and financial issues.

Key points about the summary:

• The summary includes the views of the Policy Board members on economic conditions, both domestically and globally. This includes assessments of economic growth, inflation, and employment trends, among other indicators.
• The summary also provides Policy Board members’ views on the effectiveness of the Bank of Japan’s current monetary policy measures, including interest rate policy, asset purchases, and yield curve control. Members can discuss the pros and cons of these policies and their potential impact on the economy.
• The summary includes discussions on the outlook for monetary policy and potential risks to the economy. Governing Board members may express their views on the appropriate timing and direction of future policy changes, as well as the potential impact of external factors such as global economic conditions.
• The summary also includes any dissenting opinions among Policy Council members. If a member disagrees with the majority view on a particular issue, he or she may express and justify his or her opinion.

In a few weeks we will have the minutes of this meeting. The minutes are a more detailed record of the discussions and decisions made during the meeting.

• Minutes include a more complete record of the opinions expressed, including any dissenting or alternative opinions that may not be included in the summary.
• The Summary of Opinions is usually released a few days after the policy meeting, while the Minutes are published about a month later. This means that the Summary of Opinions can provide more up-to-date information on the Bank of Japan’s current stance and view on the economy and monetary policy.
• The summary of opinions is usually written in more accessible language, making it easier to understand the Bank of Japan’s views on monetary policy.
• On the other hand, lectures are often more technical and may require a deeper understanding of economics and financial markets.
• The summary of opinions is usually shorter than the minutes.