BOJ Members Sought Active JGB Buying at April Meeting: Minutes

June 19, 2020

Tokyo- Some members of the Bank of Japan's Policy Board at its April 27 monetary policy meeting stressed the need for the central bank to further increase its purchases of Japanese government bonds, minutes of the meeting showed Friday.

They said that it is "desirable to conduct further active purchases of JGBs...with a view to stabilizing the entire yield curve at a low level," as the government is set to increase the JGB issue amount to generate funds for its stimulus measures for mitigating the impacts of the novel coronavirus crisis, according to the minutes.

One member of the board said that the BOJ "should purchase a necessary amount of JGBs without setting an upper limit."

At the meeting, the board decided on additional easing steps, including removing the cap on the BOJ's JGB buying, which had been set at about 80 trillion yen a year.

Massive JGB issuance could trigger a spike in inflation. But one board member said that it is "possible" to contain such risk as long as the BOJ firmly maintains its price stability target of 2 pct and that fiscal and monetary authorities can further cooperate in their policies.

The BOJ also released minutes of its May 22 extraordinary monetary policy meeting.

Some members pointed out that the impacts of the epidemic may last long and that the BOJ may have to continue to support financing of companies "for quite a long period."

At the May meeting, the board decided to extend its coronavirus response measures by six months until the end of March 2021 and introduce a new program to help financing of small businesses. Jiji Press