A few BOJ members called for more focus on demerits of easing: July minutes

TOKYO (Reuters) – A few Bank of Japan board members said the central bank must take into account more the potential demerits of ultra-easy policy, such as the impact on the country’s banking system, minutes of their policy meeting in July showed on Tuesday.

Some in the nine-member board also voiced concern that by mentioning in its statement that the BOJ would allow bond yields to move more flexibly around its target, long-term interest rates could rise more than was desirable.

“Although the current monetary easing has not caused any large problems in financial intermediation … it is important to take into account the two different time frames in which both the positive and negative effects (of the policy) appeared,” the minutes quoted one board member as saying.

At the July 30-31 meeting, the BOJ took steps to make its policy framework more sustainable, such as allowing bond yields to move more flexibly around its zero percent target. It kept monetary policy steady at a subsequent meeting in September.

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