• Sat. May 25th, 2024

Bank of Japan Policymakers Dividing on Whether to End Ultra-Loose Monetary Policy: Exit May Take Time

BySamantha Nguyen

Mar 28, 2024
BOJ board split on economy’s strength post stimulus exit, March summary reveals

In March, Bank of Japan policymakers were divided on whether the economy was strong enough to handle an exit from ultra-loose monetary policy. The summary of opinions showed that the next interest rate hike may take some time due to this division among board members. The BOJ recently made a historic shift away from focusing on reflating growth with massive monetary stimulus, ending eight years of negative interest rates and other unconventional policies.

Some policymakers at the meeting believed that recent data, such as significant wage hikes from large companies, justified ending ultra-loose policy since the bank is closer to its 2% inflation target. However, others stressed the need for further examination to determine if wage gains will spread to smaller firms and if rising labor costs are affecting services prices. One member mentioned the importance of a cautious stance even after ending negative rate policy, as the economy may not require rapid interest rate hikes.

The decision to exit ultra-loose policy at the March meeting was made by a 7-2 vote, with Asahi Noguchi and Toyoaki Nakamura dissenting. The summary of opinions suggests that policymakers are closely monitoring the economic situation to determine the right timing for future interest rate hikes.

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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