Some Bank of Japan board members voiced the view that sharp interest rate hikes are currently unnecessary at the central bank's two-day meeting, when the decision was made to scrap its eight-year negative rate policy, a summary of their opinions showed Thursday.
The BOJ "would need to emphasize its cautious stance in the case of terminating the negative interest rate policy, as Japan's economy is not in a state where rapid policy interest rate hikes are necessary," one of the members said at the March 18-19 gathering.
The central bank conducted its first rate hike in 17 years, overhauling its unorthodox monetary easing framework of the past decade designed to end deflation. The BOJ also decided to guide short-term interest rates within a range of zero percent and 0.1 percent.
One of the nine policy board members said that shifting to a "normal phase of monetary easing" is "quite possible without causing short-term shocks," while another said, "Achievement of the price stability target seems to have come in sight to some extent."
After the policy meeting, BOJ Governor Kazuo Ueda said at a press conference that the decision to depart from drastic monetary easing reflects the bank's growing confidence about the prospect of its 2 percent inflation target being realized stably and sustainably.
"Unprecedented monetary easing is now over," Ueda said, but added that the BOJ will maintain its accommodative policy stance, pledging to continue buying Japanese government debt to prevent a surge in bond yields that would be detrimental to the economy.
The summary of opinions was compiled by the governor and comments were not attributed to individual members.
