BOJ keeps ultra-low rates at March meeting

Bank of Japan (BOJ) policymakers remained unwavering in their resolve to keep massive monetary stimulus, even as some saw signs of change in the country’s low-inflation environment, minutes of their March policy meeting showed on Monday.

Several in the nine-member board said some big firms were raising wages and companies were more eagerly passing on rising raw material costs to households, which could put upward pressure on consumer inflation, the minutes showed.

Japan’s consumer prices rose the fastest among major advanced economies during the global inflationary cycle in the 1970s, which meant there was always a chance inflation could spiral higher once price hikes broaden, one member noted. But most others in the board warned of heightening risks to Japan’s economy from the Ukraine crisis that would keep inflationary pressure subdued, the minutes showed.

“It was therefore important for the BOJ to continue with monetary easing to support the economy’s recovery from the pandemic,” they said.