Bank of Japan decision-makers discussed further monetary easing steps, such as buying government bonds with longer maturities, at the Policy Board meeting chaired March 6 and 7 by then-Gov. Masaaki Shirakawa, the minutes showed Tuesday.
Among other options raised by the board members were lowering the interest rate on excess bank reserves at the BOJ and expanding the purchase of risky assets such as exchange-traded funds, according to the minutes.
“The time might be approaching for the bank to reconsider” the framework for monetary easing, one member opined.
At the meeting, Policy Board member Sayuri Shirai proposed immediately starting the open-ended asset purchasing and integrating the BOJ’s asset-purchase program for monetary easing with its regular bond-buying via market operations. But the proposals were rejected by the board.
In considering ways to purchase long-term government bonds, some members said it was important for the central bank to ensure that the market was confident that its large-scale purchases were not a form of “fiscal dominance,” or for financing government debt.
One member, meanwhile, noted that it might be possible for the government to share any losses from risk asset purchases by the BOJ.
On the economy, some members pointed out that exports were likely to “pick up to a considerable degree” due to improvement in external conditions, while recent falls of the yen and rises in stock prices would bring about positive effects on corporate profits as well as business and household sentiment, the minutes showed.
Regarding prices, one member said the possibility of the year-on-year rate of change in the consumer price index reaching 1 percent in the current fiscal year “was not small,” providing the economy improves as expected and the yen retains its weakness.
Shirakawa stepped down as BOJ governor March 19.
Under his successor, Haruhiko Kuroda, the bank has introduced a set of bold monetary easing steps to achieve a 2 percent inflation target.