The Bank of Japan’s newly released September meeting opinions put preventing inflation overshoot at the centre of the rate debate. Some participants favoured faster increases if prices moved above the target, while others opposed rushing. The discussion also exposed contrasting assessments of weak domestic demand and whether underlying inflation had already reached the 2 per cent objective. The opinions come from the September 17–18 meeting.
The Bank of Japan’s September meeting opinions put greater emphasis on keeping underlying inflation anchored around its 2 per cent goal. One view called for accelerating rate increases if prices showed signs of moving above the target. The summary, released on October 1, contains unattributed opinions from the September 17–18 meeting rather than a single shared statement.[1], [2]
Some opinions said underlying inflation was approaching or had broadly reached 2 per cent. A contrasting assessment said available indicators did not establish that conclusively. Members also discussed rising packaging, food-tray and distribution costs that firms could pass into selling prices. One view favoured moving rates closer to their approximate destination relatively soon. Another argued that underlying inflation was not accelerating fast enough to require hasty action.[1]
Economic assessments were also divided. One described moderate recovery despite weakness partly linked to developments in the Middle East. Another attributed weak April–June domestic demand partly to the accounting treatment of overseas patent-right sales and free school lunches. A contrasting view stressed that domestic demand had contracted and that the positive external-demand contribution reflected lower imports amid supply constraints. Those favouring an increase cited an economy more resilient than expected; opposing opinions judged recent activity too weak for an increase at that meeting.[1]
