Some of those who don’t forecast a rate move next month contend that the BOJ’s hawkish comments are aimed at merely supporting the yen. The currency stayed near a key threshold of 160 Monday morning, keeping currency traders on guard for potential government intervention.
The summary also reflected a few cautious opinions about the idea of raising the rate from the current settings of 0 to 0.1 percent. Japan’s economy contracted last quarter due to weak consumer spending and the drag from an auto industry safety scandal that temporarily halted output of some models.
While that output has been restored, a new safety scandal in the industry is currently unfolding.
“While private consumption lacks momentum, there have been successive unexpected suspensions of shipments at some automakers,” one member said. “As the bank needs to assess the effects of these factors, it is appropriate that it continue with the current monetary easing for the time being.”
The BOJ said it will specify plans at the end of next month for cutting bond buying in its first step toward quantitative tightening. It will hold meetings with market participants next month. Ueda has said the reduction will be “sizable,” prompting many in the market to speculate on the likely size of the cuts.
