Bank of Japan

December 20, 2013

The Policy Board’s final monetary policy meeting of 2012, lasting five hours and 43 minutes over two days, produced little of a surprising or noteworthy nature.  Officials released a statement that’s an extremely close facsimile to the prior November 21 statement.  Policy settings were not changed, nor was the assessment of growth conditions and inflation.  A paragraph on the outlook introduces a bit more uncertainty in phases shown below in bolded text:

Japan’s economy is expected to continue a moderate recovery as a trend, while it will be affected by the front-loaded increase and subsequent decline in demand prior to and after the consumption tax hike. The year-on-year rate of increase in the CPI is likely to rise for the time being.

Governor Kuroda adopted a confident tone regarding the policy settings, progress toward a 2% inflation goal, and the likelihood of reaching that objective with the program now in place.  Private analysts have become much less confident and widely expected new stimulus to be forthcoming when the national sales tax rises 3 percentage points to 8% next April.

Early 2014 BOJ Board meetings are scheduled for January 21-22, February 17-18, March 10-11, and April 7-8.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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