At Governor Ueda (植田)'s press conference following the Bank of Japan's Monetary Policy Meeting, the Bank indicated that it would maintain its policy of guiding the uncollateralized overnight call rate at around 0.25%. Meanwhile, Committee member Tamura (田村)'s proposal to raise the rate to around 0.5% was defeated by a majority vote in favour. Although the economy was considered to be on a moderate recovery path, the pass-through of price increases was showing signs of slowing, drawing attention to future developments.
In the opening remarks, the policy stance aimed at stabilising financial markets was explained as being maintained. The Bank of Japan was said to have decided, by a majority vote in favour, to keep the uncollateralized overnight call rate at around 0.25%. This will allow the current stance of monetary easing to continue.
In its explanation of the economic outlook, the Bank indicated that the domestic economy was recovering moderately overall, although some weakness was evident in certain areas. Against a backdrop of moderate overseas economic growth, the virtuous cycle from income to spending was expected to gradually strengthen, with growth projected to continue exceeding the potential growth rate.
Regarding price developments, it was noted that the impact of the phase in which increases in import prices were passed through to prices, as measured by the year-on-year change in the consumer price index excluding fresh food, had been waning. Accordingly, future price developments were expected to remain under close watch.
Meanwhile, Committee member Tamura (田村) submitted a proposal to raise the interest rate to around 0.5%, within the range consistent with the economic and price outlook, but the proposal was defeated by a majority vote in favour. Overall, the meeting was reported to have focused on maintaining moderate monetary easing.