Bank of Japan (BOJ) published a summary of the views of the monetary policy meeting in March, with reference to the main results below.
Main quotes
One of the members said that inflation exceeds the expectations.
One of the members said that the high wages in the wage talks in the spring somewhat exceeding the numbers of last year, as the nominal wages rise at a pace in line with the goal of the price of the BOJ.
One of the members said that high wages are likely to support consumption.
One member said that there are questions about whether wage gains will be sustainable.
One member said that global economic uncertainty is increasing.
One member said that increased uncertainty about the global economy may be a new risk factor since our previous meeting in January.
One member said that the American inflationary risks and the risk of aggravation of the economy increase.
One member said that the basic inflation is likely to accelerate about 2 %, given the high price and the results of the wage talks.
One member said that the policies of the new US administration could affect prices in Japan through fluctuations in the markets and FX prices.
Market reaction
After the BOJ Summary of Opinions, the JPY pair rose 0.14 % a day to trade at 155.30 to writing.
Common questions between the Bank of Japan
Japan Bank is the Japanese Central Bank, which sets the monetary policy in the country. Its mandate is to issue banknotes, currency implementation and monetary control to ensure price stability, which means the purpose of inflation is about 2 %.
The Bank of Japan began a very monetary policy in 2013 to stimulate the economy and enlarge fuel in a low -inflation environment. The bank’s policy depends on quantitative and qualitative mitigation, or print notes to buy assets such as government bonds or companies to provide liquidity. In 2016, the bank doubled its strategy and increased the policy of alleviating it by providing negative interest rates first, and then directly controls the return of its government bonds for 10 years. In March 2024, BOJ raised interest rates, and effectively retreated from the high -drawing monetary policy position.
The massive incentive of the bank caused a decrease in its decrease against its main peers. This process was exacerbated in 2022 and 2023 due to the increased difference of policy between the Bank of Japan and other major central banks, which chose to increase interest rates sharply to fight high inflation levels. BOJ policy has expanded teams with other currencies, which pulled the yen value. This trend was partially reflected in 2024, when BOJ decided to give up the position of the superior policy.
The weakest yen and the increase in global energy prices increased Japanese inflation, which exceeded the BOJ goal by 2 %. The possibility of high salaries in the country – a major element in inflation in feeding – also contributed to this step.
