BoJ Summary of Opinions: Member says suitable to keep hiking as conditions remain accommodative

The Bank of Japan (BoJ) published the Summary of Opinions from the June monetary policy meeting, with the key findings noted below.   

Key quotes

One member said it’s become more suitable to modify monetary support as currency moves raise import costs

One member says suitable to keep raising interest rate as financial conditions remain accommodative

Even after June rate increase, central bank must keep option for further hikes if economy, prices follow forecasts. 

One member says policy rate should be raised toward neutral level as soon as possible. 

One member said central bank must raise policy rate near neutral soon to prevent large, abrupt hikes later. 

Japan's neutral rate is about 2%, BOJ should raise rates every few months. 

Cabinet office representative states BOJ must ensure accountability on rate hike, take proactive, appropriate steps amid excessive economic fluctuations. 

Cabinet Office rep says BOJ must assess macroeconomic effects of shrinking balance sheet, take steps for market stability. 

One member notes concern over economic slowdown has eased. 

Downside risks to output, employment could disrupt virtuous cycle between wages and prices, possibly drive Japan back into deflation. 

Downside risks to output, employment could disrupt virtuous cycle between wages and prices, possibly drive Japan back into deflation. 

One member warns firms' active price-setting could drive inflation higher. 

One member notes wholesale price increases clearer, especially in distribution costs, may impact core inflation. 

Market reaction  

Following the BoJ’s Summary of Opinions, the USD/JPY pair is up 0.02% on the day to trade at 161.60 as of writing.