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BOJ Minutes: Members agreed inflation expectations are picking up

“Several members said there is upward pressure seen in consumer inflation, which is already positive when stripping away impact of cellphone fee cuts,” as per the latest Monetary Policy Meeting Minutes from the Bank of Japan (BOJ).

Key statements from the Minutes

One member said must be vigilant to risk Fed’s tapering, expected rate hike could cause stock price falls, yen rise.

One member said upward pressure on consumer prices appears to be increasing as a trend as raw material costs continue to rise.

One member said wide range of goods are seeing prices rise, not just prices of food and energy-related goods.

One member said there appeared to be sign of change in companies’ price-setting behavior.

One member said upward pressure on consumer prices likely to strengthen ahead as a trend.

One member said BOJ must patiently maintain current monetary easing as Japan’s price developments different from those of US.

One member said Japan unlikely to see the kind of sharp wage rises seen in u.s. but need to be mindful of chance of overshoot in economic growth, inflation.

One member said hard to achieve BOJ price goal by end of fiscal 2023 but looking out for change in corporate price-setting behavior, inflation expectations.

FX reaction

USD/JPY refreshed intraday low to 113.86 following the BOJ Meeting Minutes. In addition to the Minutes, risk-off mood also weighed on the yen pair.

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