The BOJ minutes for the October meeting unveiled that policymakers voted unanimously to maintain the asset purchase program so that the monetary base would increase at an annual pace of about 60-70 trillion yen. The central bank acknowledged that Japanese economy recovered at a moderate pace and this trend would likely continue. Yet, risks to the country's growth remained high and they included 'prospects for the European debt problem, developments in the emerging and commodity-exporting economies, and the pace of recovery in the U.S. economy".
Policymakers noted that the Japanese economy was 'on the way to recovery at a moderate pace'. The upward trends of 'household income and business investment continued to be on upward trends', improvement in exports and governmental policies should support this trend in future. They were also confident that deflation was ending and the 'year-on-year rate of increase in the CPI is likely to rise gradually'. On monetary policy, the BOJ pledged to continue with quantitative and qualitative monetary easing with the aim of achieving 'the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner'.
As the BOJ meeting was held after the Fed's September meeting at which policymaker refrained from announcing QE tapering, the BOJ specifically responded to the decision. As stated in the minutes, some members suggested that 'market participants seemed to perceive that it had become more difficult to predict the direction of monetary policy, and it was necessary to pay attention to the risk that large fluctuations would occur again in the markets, depending on developments in U.S. monetary policy' and 'one member expressed the view that the rapid tightening of financial conditions, amid the slow pace of improvement in the employment situation and the continuing disinflationary trend, had affected the decision made at the FOMC meeting'. Moreover, a few members were concerned that 'if speculation about the direction of U.S. monetary policy heightened, outflows of funds from emerging economies and accompanying turmoil in the markets could occur again'.
The BOJ was also inspired by the market speculations of Fed's policy outlook. According to the minutes, 'a few members pointed out that it was important for the Bank to continue devising ways to communicate more effectively to the markets while taking account of the recent experiences of the United States'
Policymakers noted that the Japanese economy was 'on the way to recovery at a moderate pace'. The upward trends of 'household income and business investment continued to be on upward trends', improvement in exports and governmental policies should support this trend in future. They were also confident that deflation was ending and the 'year-on-year rate of increase in the CPI is likely to rise gradually'. On monetary policy, the BOJ pledged to continue with quantitative and qualitative monetary easing with the aim of achieving 'the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner'.
As the BOJ meeting was held after the Fed's September meeting at which policymaker refrained from announcing QE tapering, the BOJ specifically responded to the decision. As stated in the minutes, some members suggested that 'market participants seemed to perceive that it had become more difficult to predict the direction of monetary policy, and it was necessary to pay attention to the risk that large fluctuations would occur again in the markets, depending on developments in U.S. monetary policy' and 'one member expressed the view that the rapid tightening of financial conditions, amid the slow pace of improvement in the employment situation and the continuing disinflationary trend, had affected the decision made at the FOMC meeting'. Moreover, a few members were concerned that 'if speculation about the direction of U.S. monetary policy heightened, outflows of funds from emerging economies and accompanying turmoil in the markets could occur again'.
The BOJ was also inspired by the market speculations of Fed's policy outlook. According to the minutes, 'a few members pointed out that it was important for the Bank to continue devising ways to communicate more effectively to the markets while taking account of the recent experiences of the United States'
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