According to the BoJ minutes from its April meeting, members of the Bank of Japan (BoJ) management board shared their views on the prospects for monetary policy on Wednesday.

Key quotes

The member agreed that consumption was likely to boost moderately.

Several members said that companies may become more energetic in raising prices and wages than initially expected.

Members discussed the risks related to the impact of the faint yen on inflation.

One member said the impact of the faint yen on inflation and wages may not prove short-lived.

One member said a faint yen could lead to core inflation overshooting.

One member said the BOJ must, without a prior plan, carefully analyze whether companies can resume efforts to pass on rising import costs through price increases.

Members shared the view that the BOJ needs to analyze how the recent declines in the yen could impact core inflation.

One member said investment spending and consumption would be key to the future outlook for monetary policy.

One member stated that there are various threats to inflation.

Several members said that the exchange rate is one of the key factors influencing the economy and prices, and therefore the BOI must respond with monetary policy if the outlook and risks change.

One member said the BOJ must respond with monetary policy if exchange rate volatility affects companies’ medium- and long-term inflation expectations.

One member said the BOJ needs to deepen the debate on the timing and degree of future interest rate increases.

One member said the BOJ may raise interest rates moderately until it is sufficiently confident that it can sustainably achieve its price target to avoid having to raise rates quickly later.

One member said Boi must raise interest rates in an appropriate and timely manner to avoid putting pressure on the economy.

One member said there was enough chance that the pace of policy normalization could accelerate if core inflation continued to run above par, partly because of the faint yen.

Market reaction to the BoJ protocol

At the time of writing, USD/JPY is down 0.02% on the day at 157.83.