Sunday, June 23, 2024

BOJ discussed timely rate rise at June meeting

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The Bank of Japan engaged in a conversation regarding the potential for an imminent increase in interest rates during the month of June. A summary of the meeting that occurred on Monday disclosed this information. The board's increasing concern regarding the escalating inflationary pressures within the world's third-largest economy was disclosed during the discussion. Consequently, discussions were initiated regarding the potential for an interest rate increase as early as the upcoming policy meeting, which is scheduled to occur on July 30-31.
The recent depreciation of the yen has increased the probability of a change in the inflation estimates made by the Bank of Japan, which indicates that there may be a potential adjustment in the appropriate level of the policy rate. During the policy meeting that took place on June 13-14, one of the members voiced the opinion that the inflationary trends presented the possibility that the central bank would be required to establish a higher policy rate.
Some board members have expressed a preference for a rapid increase in interest rates; however, other board members have taken a more cautious posture, highlighting the significance of watching the effect that growing wages have on consumer spending during this period. The Bank of Japan's announcement that it would present a comprehensive strategy in the upcoming month with the goal of reducing its $5 trillion balance sheet suggested a gradual transition toward normalizing its monetary policy. This announcement was made during the June meeting, during which the Bank of Japan maintained short-term rates at 0.7 percent.


Summary News: At June meeting, BOJ discussed rate hike

Bank of Japan may boost rates due to growing inflation in the world's third-largest economy. The yen's depreciation may enhance inflation expectations and change the policy rate. Some board members desire a speedy growth, while others fear consumer spending. The Bank of Japan plans to gradually normalize monetary policy by reducing its $5 trillion balance sheet.


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Source: BOJ debated need for timely rate hike at June meeting, summary shows
Source: BOJ debated need for timely rate hike at June meeting, summary shows
Sources: Reuters,

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