TOKYO, Jan 23 (Reuters) – Government officials who attended the Bank of Japan’s policy meeting in December were granted a half-hour adjournment to contact their ministries, minutes show, pointing out the importance of the central bank’s decision to change its bond market peg.
In Dec. At the 19-20 meeting, the BOJ maintained its ultra-loose monetary policy but shocked markets with a surprise change to its yield curve control (YCC) policy that allowed interest rates to long term to go up.
Before the nine-member council votes on the measures, government officials asked that the meeting be adjourned for about 30 minutes, the minutes posted Monday.
Governor Haruhiko Kuroda approved the request as chairman of the BOJ meeting, according to the minutes.
“The government understands that the issues discussed today were aimed at conducting monetary easing in a more sustainable manner towards achieving the BOJ price target,” said a Ministry of Finance (MOF) official attending the meeting. meeting. the bank’s inflation target.
Another government official, who was from the Cabinet Office, urged the BOJ to be vigilant about the fallout from rising inflation, supply constraints and market volatility on the Japanese economy, according to the lawsuit. -verbal.
The two representatives expressed no opposition to the change in yield monitoring or any other element of the BOJ’s discussion, according to the minutes.
Two government officials – one from the MOF and the other from the Cabinet Office – are legally permitted to attend BOJ policy meetings and express government views on policy decisions, although they cannot vote.
At a press conference on Monday, Finance Minister Shunichi Suzuki said he was briefed by the Finance Ministry representative on the expected BOJ decision during the adjournment.
It is rare for government officials to call for the adjournment of BOJ meetings, which only happens in times of key decisions such as a change in monetary policy.
For example, the government got an adjournment at a meeting when the BOJ introduced negative interest rates in January 2016, according to the minutes of that meeting.
Under YCC, the BOJ sets the short-term interest rate target at -0.1% and the 10-year bond yield target at around 0% with a small tolerance margin.
At the December meeting, the range set around the 10-year yield target was doubled to 0.5 percentage point up and 0.5 percentage point down, a move aimed at smoothing out distortions of the market caused by the massive purchases of bonds by the BOJ.
Reporting by Leika Kihara; Editing by Bradley Perrett and Jacqueline Wong
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