BOJ's July debate highlights rift in view on rate hike timing
By Leika Kihara
TOKYO (Reuters) -Bank of Japan policymakers agreed on the need to maintain ultra-loose monetary settings but were divided on how soon the central bank could end negative interest rates, minutes of its July meeting showed on Wednesday.
The nine board members also diverged in their views on whether companies would keep hiking wages next year, the minutes showed, highlighting uncertainty on how quickly the BOJ could begin phasing out its massive stimulus programme.
One member said there was «still a significantly long way to go» before the BOJ can revise its negative interest rate policy, the minutes showed.
Another member, however, said achievement of the BOJ's 2% inflation target had «clearly come in sight,» adding that it might be possible to assess whether the target has been met «around January through March 2024,» the minutes showed.
Many members agreed the central bank must keep interest rates ultra-low for now as stable, sustainable achievement of its 2% target was not yet in sight, the minutes showed.
At the July meeting, the BOJ maintained its easy policy settings but took steps to allow long-term borrowing costs to rise more freely in line with increasing inflation and economic growth.
While Governor Kazuo Ueda dismissed the view the July action was a prelude to a future exit from its current policy, many market players now expect the BOJ to begin phasing out its massive stimulus programme later this year or in 2024.
Ueda has said the BOJ has no pre-set idea on what order it will dismantle yield curve control (YCC), a policy that guides short-term interest rates at -0.1% and caps the 10-year bond yield around 0%.
The board members agreed in July that it was important to check whether wages will
Read more on investing.com
