BOJ Minutes: Staying the Course

The minutes of the BOJ’s monetary policy meeting on June 10-11 were released today. The members seem to be satisfied with the initial success of the QE policy they implemented in April. So they will stay on course:

With respect to the future conduct of monetary policy, most members shared the view that the Bank would continue with quantitative and qualitative monetary easing, aiming to achieve the price stability target of 2 percent, as long as it was necessary for maintaining this target in a stable manner.

They had been concerned about the volatility of bond yields lately. However, they noted “that fluctuations in long-term interest rates had recently been subdued, reflecting market participants' positive response to the Bank's revision to the operational outline for outright purchases of JGBs following the meetings with market participants.” There was some discussion of providing additional forward guidance on short-term interest rates:

In this regard, a few members expressed the view that, in order to reduce such differences and stabilize interest rates, it was vital for the Bank to firmly anchor short-term interest rates at low levels by reiterating its commitment to continuing with quantitative and qualitative monetary easing as long as it was necessary for maintaining the price stability target of 2 percent in a stable manner.