BoJ meeting minutes: Moderate economic recovery continues amid stable global demand

In the Bank of Japan’s November 1 monetary policy meeting minutes, the 9-member policy board maintained optimism over the rate of economic recovery amid stabilization observed in global consumer demand.

The Board noted that exports are likely to increase moderately in due course when the effects of the slowdown in overseas economies and the past appreciation of the yen would probably gradually diminish.

At the meeting, the bank decided to continue to apply a negative interest rate of minus 0.1 percent to the policy rate balances in current accounts held by financial institutions. The Bank also said it would purchase JGBs so that 10-year JGB yields would remain at around zero percent.

Further, BoJ Governor Kuroda added that it is important to achieve room for monetary policy responses, aiming at 2 percent inflation target, which is a global standard and raising the interest rate that is neutral to economy.

He further said that the 10-yr JGB yields have remained stable around zero pct even as long-term rates in many other economies rose, showing that the BoJ's yield curve control is exerting intended effects. One board member said that the purchase of JGBs could also be phased down in the near term as the BoJ strives to achieve its target with fewer purchases. One member added that the CB should adopt negative rates in response to shocks. The policy meeting last month had a wide array of views over the policy framework.

Meanwhile, the USD/JPY traded at 117.06, down -0.24 percent, while at 9:00GMT, the FxWirePro's Hourly Yen Strength Index remained highly bullish at 161.66 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex