Members of the Bank of Japan's Monetary Policy Board said that Japan's economy is expanding moderately and should continue to do so, minutes from the bank's December 20-21 meeting revealed on Friday.
"The Bank will make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target," the minutes said
At the meeting, the central bank decided to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.
It also voted to maintain its aggressive monetary easing, as inflation remains well below the 2 percent target. The bank will hold its target of raising the amount of outstanding JGB holdings at an annual pace of about JPY 80 trillion.
The bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.
"The year-on-year rate of change in the CPI for all items less fresh food was in the range of 0.5-1.0 percent, while the rate of change for all items less fresh food and energy remained slightly positive," the minutes said.
The board also noted that inflation expectations are in a weakening phase, although prices are expected to maintain an upward trend over the longer term.
The bank added that private consumption has been increasing moderately and business fixed investment continued an increasing trend with corporate profits and business sentiment improving.
"With regard to the outlook, the year-on-year rate of change in the CPI (all items less fresh food) was likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium- to long-term inflation expectations," the minutes said.
by RTT Staff Writer
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