BOJ December monetary policy meeting Summary of Opinions

Bank of Japan Dec 17 and 18 policy meeting summary

Main Headline points via Reuters:


  • BOJ must examine extending deadline, possibly expand content, of fund-aid programme timing with compilation of govt’s new stimulus package
  • important to examine BOJ’s monetary easing as pandemic means it will take even more time to achieve BOJ’s price goal
  • good to eye March meeting in laying out findings of BOJ’s policy examination as it will focus on operation of current framework
  • BOJ must comprehensively review anew what strategy it should take in hitting its price goal
  • BOJ must examine its strategy, policy means and communication to ensure japan does not return to deflation
  • BOJ doesn’t need to tweak YCC, can also maintain its commitment including its pledge to hit 2% inflation
  • BOJ must examine pros and cons of its policy, must seek ways to enhance sustainability, effect of its policy as needed
  • BOJ must seek ways to more flexibly adjust its ETF buying as its monetary easing is prolonged
  • BOJ must be ready to effectively respond to changes in economy, financial conditions by heightening sustainability of YCC, asset buying via more flexible operation
  • more meticulous control of yield curve will become necessary as moderate steepening of yield curve has some merits
  • important for BOJ to take swift, effective policy response in coordination with govt, other central banks
  • appropriate for BOJ to cut short, long-term yield targets, strengthen commitment on monetary easing
  • BOJ must help companies achieve sustainable growth, creating bigger corporate bond market important
  • BOJ must continue to keep eye out on risks including abrupt moves in FX market
  • there is considerable risk japan will return to deflation


More of the same from the Bank, there is no indication of any winding back of easing. The BOJ highlight March as a meeting to watch for perhaps even more.

Interesting the summary makes specific mention of ‘abrupt moves in FX’. This is code for strengthening yen, the BOJ does not want the yen to gain and will attempt to jawbone it lower if it does. You may recall the news from last week that Prime Minister Suga has drawn a line in the sand at 100 for USD/JPY.