The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook on Wednesday, per the BoJ Minutes of the January meeting.    

Key quotes

One member said although downward pressure on consumption resulting from the rise in interest rates warranted attention, the impact on the overall financial system was likely. 

Some members said financial institutions lending attitudes and firms financial positions had thus far remained at favorable levels overall. 

One member said if the pace of policy interest rate hikes was not too rapid, the bank did not need to be overly concerned about the impact on firms business performance. 

One member said Bank of Japan can keep policy rate steady at this meeting, and such decision was unlikely to increase concern Bank of Japan was falling behind the curve. 

Members agreed that, given real interest rates were at significantly low levels, if its outlook for economic activity and prices was realized, it was appropriate for BOJ to keep raising interest.

On pace of policy adjustment, most members agreed it was desirable to make decisions as appropriate at each monetary policy meeting without having a specific pace in mind. 

One member said given the recent depreciation of the yen, current financial conditions remain considerably accommodative. 

One member said while risk of BOJ falling behind the curve had not necessarily become more evident, it was becoming more important to conduct monetary policy carefully and timely. 

One member said BOJ should not take too much time examining impact of past rate hike, proceed with next hike without missing proper timing. 

One member said it was appropriate for the bank to raise the policy interest rate at intervals of a few months.

Market reaction to the BoJ Minutes 

At the time of writing, USD/JPY is up 0.01% on the day at 158.73.