[ad_1]
© Reuters. A billboard of the Bank of Japan is displayed at headquarters in Tokyo
By Leika Kihara
TOKYO (Reuters) – Politicians at the Bank of Japan have expressed disagreement over the speed with which the central bank should implement monetary stimulus, revealed the report of last January's rate review. that rising risks abroad threatened to undermine the country's fragile economic recovery.
Most members agreed that it was appropriate to maintain the current stimulus package of the Bank of Japan, but one of them said that the central bank should insist on its willingness to take "quick, flexible and bold" measures, including additional easing, showed the minutes.
"Given the delay in reaching the price target, it was not advisable to adopt a position of taking no action before the occurrence of a crisis serious, "said the deputy in a report.
Another member, however, said that acting too precipitously in times of uncertainty could result in financial imbalances and unnecessary fluctuations in the economy, revealed the minutes of the meeting.
Some members of the nine-member board also warned that a growing number of regional banks could take excessive risks to secure their profits, as years of extremely low interest rates have hurt their bottom line. net, revealed the minutes.
"We need to look carefully at whether regional banks are providing loans so as to generate risk-adjusted returns," said one of the members.
The BOJ maintained the monetary parameters unchanged at the January meeting, promising to guide short-term rates to less than 0.1% and 10-year bond yields around zero as part of a policy Yield Curve Control (YCC).
YCC IMPACT UNDER DOUBT
The BOJ faces a dilemma. Years of heavy money printing for badet purchases have dried up the liquidity of the market and weighed on commercial bank profits, fueling concerns over the growing risks of prolonged easing.
And yet controlled inflation has left the BOJ far behind the other major central banks in crisis policy, leaving it with little ammunition to face the next recession.
In an interview with Reuters on Monday, Isao Kubota, influential president of a large regional bank, said the BOJ's extremely flexible policy makes it difficult for commercial banks to reap the benefits of loans.
"We are in the sixth year of this policy and, intuitively, the accumulation of side effects could be huge," Kubota said.
Given the weakening of global demand that has affected the export-dependent Japanese economy, the board discussed the effectiveness of the current price increase program.
One member said that the Youth Policy Commission's youth policy had had a limited impact on rising prices and inflation expectations.
"This member said that it was necessary to deepen the badysis and taking into account the relationship between inflation and the level of interest rates or the monetary base," according to the trial Proceedings.
The minutes showed that some policymakers felt that it would be possible to strengthen policy coordination with the government if the risks abroad were a severe blow to the Japanese economy.
Although the minutes do not indicate the names of the board members who made these comments, Goushi Kataoka, of the BOJ, has publicly stated that tighter fiscal and monetary measures may be needed to prevent a further slowdown. economic.
The deputy governor, Masazumi Wakatabe, is also seen by the markets as one of the BoJ board members in the reflationary spirit.
Many BoJ members hope that the Japanese economy will emerge from the difficult period in the second half of this year. But if conditions continue to deteriorate, the BoJ could face pressure to offer additional monetary support, badysts said.
Still, BOJ Governor Haruhiko Kuroda has ruled out any possibility of further monetary easing in the short term. A well known tax hawk, he also warned against the idea that the government could spend recklessly to pull the economy out of the slump.
[ad_2]
Source link
