The minutes show that the policymaker wants the BOJ to consider further rate hikes

TOKYO (Jiji Press) – A Bank of Japan policymaker called on the central bank to consider raising interest rates further at a meeting in March as it hiked rates for the first time in 17 years, according to minutes of the meeting that were released on Thursday.

The BOJ board member believed that “it was appropriate to pursue deliberately but steadily the normalization of monetary policy in response to developments in economic activity and prices,” according to the minutes of the 18 and March 19.

At the meeting, the BOJ board voted to end the central bank’s negative interest rate policy after many members shared the view that the chances of hitting the 2% inflation target have further increased, the minutes show.

The minutes showed that many board members “shared the recognition that it was appropriate for the bank to consider changing the monetary policy framework as the large-scale monetary easing measures… had likely fulfilled their role.”

One board member said it was “appropriate for the bank to reach the starting line of monetary policy normalization at this meeting,” according to the minutes.

At the meeting, the BOJ board voted to continue buying Japanese government bonds at a monthly rate of about ¥6 trillion.

The minutes showed that some members pointed out that the actual amount of JGB purchases “should be determined flexibly… with some higher and lower allowances, while taking into account market developments.”

Some members felt it was “desirable that the bank at some point in the future would reduce the amount of JGB purchases, and also reduce the amount outstanding on its JGB holdings,” the minutes said.

The minutes showed one board member saying that “there may have been a shift in the norm that wages don’t rise easily,” referring to the prospects for continued wage increases during shunto workers’ wage talks this spring.

However, one board member cautioned that “it still cannot be said that the virtuous cycle from prices to wages has become more robust on a national basis.”

The minutes showed that a board member also warned that “there would be a risk that the achievement of the price stability target would be delayed as the momentum of the positive cycle in the Japanese economy would be lost.”