Bank of Japan keeps policy steady in June

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As expected the Bank of Japan has left monetary policy settings steady at the conclusion of its June meeting.

The bank will continue to expand its monetary base by an annual rate of around 80 trillion yen.

As has been the case at recent meetings the board voted 8-1 in favour of the decision with Kiuchi yet again dissenting. The full policy statement from the BOJ can be accessed here.

While that was entirely expected there was a surprise with the bank announcing that they will cut the number of monetary policy meetings held each year from 14 to 8, starting in January next year.

Here’s the statement released by the BOJ on the changes:

“At the Monetary Policy Meeting (MPM) held today, the Policy Board of the Bank of Japan decided, by a unanimous vote, to make the following changes concerning MPMs in order to further enhance deliberations at the MPMs and the Bank’s communication on monetary policy. Those changes will take effect in January 2016 on condition that the relevant ordinance is revised by the Cabinet. Under a new framework, the Bank will provide, with higher frequency, more detailed forecasts for Japan’s economy and prices, which serve as the basis of policy decisions. In addition, the Bank will start releasing a document that contains summary of opinions presented at each MPM soon after the meeting. The framework — in which (1) forecasts for the economy and prices are released on a quarterly basis, (2) meetings on monetary policy are held eight times a year, that is, four meetings for forecasts and four other meetings in between them, and (3) a summary of discussion at each MPM is released quickly — has been widely adopted by major central banks.

Releasing the Outlook for Economic Activity and Prices on a Quarterly Basis
The Bank will increase the frequency of publication of the Outlook for Economic Activity and Prices (hereafter the Outlook Report) from the current semiannual basis to a quarterly basis: the Outlook Report will be released immediately after the MPMs held in January, April, July, and October.

Releasing Each Policy Board Member’s Forecasts for and Risk Assessments of the Economy and Prices
In addition to the forecasts for the economy and prices of the majority of Policy Board members, each member’s forecasts and risk assessments will be released (see Attachment for sample charts)

Releasing “Summary of Opinions”
A document that contains summary of opinions presented at each MPM (“Summary of Opinions”) will be compiled and be released in about a week after the meeting.

Changing the Frequency of MPMs
The Bank will hold MPMs eight times a year; four MPMs for the Outlook Reports and four other MPMs in between them for updating developments in the economy and prices — currently, MPMs are held about 14 times a year”.

Governor Haruhiko Kuroda will hold his scheduled post-meeting media conference from 4.30pm Sydney time.

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