Minutes of the
Monetary Policy Meeting
on January 17 and 18, 2007
(중략)
III. Summary of Discussions on Monetary Policy for the Immediate Future
Based on their assessment of the economic and financial situation, members agreed that their basic thinking remained unchanged on the future path of monetary policy: the Bank would adjust the level of the policy interest rate gradually in the light of developments in economic activity and prices, while maintaining the accommodative
financial conditions ensuing from very low interest rates for some time.
On this basis, some members commented on the guideline for money market operations for the intermeeting period ahead that it would be appropriate to raise the uncollateralized overnight call rate target from around 0.25 percent to around 0.5 percent.
They were of the view that, given that recently released economic indicators did not necessitate a change in the Bank's assessment of the mechanisms underlying Japan's economy, it would be appropriate to adjust the level of the policy interest rate at this juncture so that a desirable course of economic activity and prices would be maintained, and this adjustment would contribute to price stability and sustainable growth in the long term.
Regarding risks arising from maintaining the policy interest rate at the current level, they said that the stimulative effect of monetary policy on economic activity and prices might be amplified excessively or expectations that interest rates would remain low for a long time regardless of economic activity and prices might increase.
Against this view, the majority of members said that it would be appropriate to maintain the current guideline for money market operations that the Bank would encourage the uncollateralized overnight call rate to remain at around 0.25 percent. They expressed the view that, although the virtuous circle of production, income, and spending led by an increase in exports reflecting the expansion of overseas economies remained intact, recent economic indicators showed mixed developments and therefore it would be appropriate to continue to carefully examine incoming economic indicators as well as other relevant information to more accurately assess developments in economic activity and prices.
They expressed the view that, in its conduct of forward-looking monetary policy, it was important for the Bank to confirm with a high degree of confidence that economic activity and prices would develop in line with its projections, and in the current situation there was time for further examination. A few of these members added that, when it was confirmed with a high degree of confidence after thorough examination, the Bank should adjust the level of
the policy interest rate without delay to prevent expectations from taking hold that interest rates would remain low for a long time regardless of economic activity and prices. Some members raised key factors that required close monitoring, such as developments in
overseas economies, particularly the U.S. economy, the course of the household sector, and the environment surrounding prices, and expressed the view that it was important to accurately assess the future trend of Japan's economy by examining these key factors.
Members discussed the Bank's communication of its thinking concerning the conduct of monetary policy. Many members raised the issue of how the Bank should communicate with market participants given the recent large swings in the market's view regarding the timing of a policy change.
Some members pointed out that the term "forward-looking monetary policy" might have been misinterpreted as monetary policy conducted according to a predetermined time schedule. On this point, members agreed that the Bank's conduct of monetary policy should be decided solely based on a thorough discussion of economic activity and prices at every Monetary Policy Meeting, and any policy change should not be made based on a predetermined time schedule or predetermined intervals.
Some members noted that, in conducting forward-looking monetary policy, it was a prerequisite that the Bank appropriately assess future developments in economic activity and prices based on a careful examination of economic indicators as well as other relevant information available. These members said that the Bank should make efforts to encourage better understanding among the public of its thinking concerning the future course of monetary policy, which was that it would adjust the level of interest rates gradually in the light of developments in economic activity and prices as had been explained in the October Outlook Report.
Based on the above discussions, members reaffirmed the following: the Bank was not conducting monetary policy based on a predetermined time schedule; the Bank considered it important to make projections regarding economic activity and prices after carefully examining economic indicators as well as other relevant information available; thus, forward-looking and data-dependent approaches in conducting monetary policy were conceptually consistent; and the Bank should explain these points carefully.
Members also commented on points that the Bank needed to bear in mind in its communication. A few members said that, in communicating with market participants, the Bank should make efforts to encourage better understanding of its assessment of economic and financial developments as well as its basic thinking about the conduct of monetary policy, and added that its explanation should be based on the common understanding reached through discussions at Monetary Policy Meetings.
(하략)
※출처: 일본은행
Monetary Policy Meeting
on January 17 and 18, 2007
(중략)
III. Summary of Discussions on Monetary Policy for the Immediate Future
Based on their assessment of the economic and financial situation, members agreed that their basic thinking remained unchanged on the future path of monetary policy: the Bank would adjust the level of the policy interest rate gradually in the light of developments in economic activity and prices, while maintaining the accommodative
financial conditions ensuing from very low interest rates for some time.
On this basis, some members commented on the guideline for money market operations for the intermeeting period ahead that it would be appropriate to raise the uncollateralized overnight call rate target from around 0.25 percent to around 0.5 percent.
They were of the view that, given that recently released economic indicators did not necessitate a change in the Bank's assessment of the mechanisms underlying Japan's economy, it would be appropriate to adjust the level of the policy interest rate at this juncture so that a desirable course of economic activity and prices would be maintained, and this adjustment would contribute to price stability and sustainable growth in the long term.
Regarding risks arising from maintaining the policy interest rate at the current level, they said that the stimulative effect of monetary policy on economic activity and prices might be amplified excessively or expectations that interest rates would remain low for a long time regardless of economic activity and prices might increase.
Against this view, the majority of members said that it would be appropriate to maintain the current guideline for money market operations that the Bank would encourage the uncollateralized overnight call rate to remain at around 0.25 percent. They expressed the view that, although the virtuous circle of production, income, and spending led by an increase in exports reflecting the expansion of overseas economies remained intact, recent economic indicators showed mixed developments and therefore it would be appropriate to continue to carefully examine incoming economic indicators as well as other relevant information to more accurately assess developments in economic activity and prices.
They expressed the view that, in its conduct of forward-looking monetary policy, it was important for the Bank to confirm with a high degree of confidence that economic activity and prices would develop in line with its projections, and in the current situation there was time for further examination. A few of these members added that, when it was confirmed with a high degree of confidence after thorough examination, the Bank should adjust the level of
the policy interest rate without delay to prevent expectations from taking hold that interest rates would remain low for a long time regardless of economic activity and prices. Some members raised key factors that required close monitoring, such as developments in
overseas economies, particularly the U.S. economy, the course of the household sector, and the environment surrounding prices, and expressed the view that it was important to accurately assess the future trend of Japan's economy by examining these key factors.
Members discussed the Bank's communication of its thinking concerning the conduct of monetary policy. Many members raised the issue of how the Bank should communicate with market participants given the recent large swings in the market's view regarding the timing of a policy change.
Some members pointed out that the term "forward-looking monetary policy" might have been misinterpreted as monetary policy conducted according to a predetermined time schedule. On this point, members agreed that the Bank's conduct of monetary policy should be decided solely based on a thorough discussion of economic activity and prices at every Monetary Policy Meeting, and any policy change should not be made based on a predetermined time schedule or predetermined intervals.
Some members noted that, in conducting forward-looking monetary policy, it was a prerequisite that the Bank appropriately assess future developments in economic activity and prices based on a careful examination of economic indicators as well as other relevant information available. These members said that the Bank should make efforts to encourage better understanding among the public of its thinking concerning the future course of monetary policy, which was that it would adjust the level of interest rates gradually in the light of developments in economic activity and prices as had been explained in the October Outlook Report.
Based on the above discussions, members reaffirmed the following: the Bank was not conducting monetary policy based on a predetermined time schedule; the Bank considered it important to make projections regarding economic activity and prices after carefully examining economic indicators as well as other relevant information available; thus, forward-looking and data-dependent approaches in conducting monetary policy were conceptually consistent; and the Bank should explain these points carefully.
Members also commented on points that the Bank needed to bear in mind in its communication. A few members said that, in communicating with market participants, the Bank should make efforts to encourage better understanding of its assessment of economic and financial developments as well as its basic thinking about the conduct of monetary policy, and added that its explanation should be based on the common understanding reached through discussions at Monetary Policy Meetings.
(하략)
※출처: 일본은행
