Some in Bank of Japan urged scrutiny on Covid-19 response: Sept meeting minutes

[TOKYO] Some Bank of Japan policymakers called for deeper scrutiny on how to address the fallout from the coronavirus pandemic as the economic outlook remained highly uncertain, minutes of the central bank's September rate review showed on Wednesday.

Many in the nine-member board agreed that maintaining the current ultra-loose monetary policy was sufficient for now to cushion the economic blow from the pandemic, it showed. But some saw the need to debate how the BOJ could re-shape its policy in an era where the population must balance the need to contain the virus and sustain economic activity.

"One member said it would be necessary to reconsider the (BOJ's) strategy toward achieving its price target," as the target grows more elusive, the minutes showed.

Another member said the BOJ should discuss how monetary policy could help address structural problems Japan faces, such as the need to digitalise its economy and curb job losses particularly among non-permanent workers, it showed.

"In order to achieve the price target, it was essential, mainly for small and medium-sized firms, to implement reforms to raise productivity beyond cutting their costs," a different member said.

The BOJ kept monetary policy steady in September, having already ramped up stimulus twice this year to ease corporate funding strains and stabilise financial markets.

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BOJ Governor Haruhiko Kuroda has said the central bank will focus on pumping liquidity to cash-strapped firms hit by the pandemic. He has also signalled that deeper debate on how to achieve its elusive 2 per cent inflation target will be put on the back burner.

REUTERS