Three on BOJ board opposed unusual easing decision in 2003: transcript


The Bank of Japan’s unusual decision to ease monetary policy despite increasing signs of economic recovery at a policy meeting in October 2003 drew dissent from some BOJ policymakers, according to a transcript of the meeting released Thursday.

Proposing the unusual measure at the Oct. 9-10 meeting in 2003, then-BOJ Gov. Toshihiko Fukui said the move was “designed to make doubly sure Japan’s path toward overcoming deflation though the current situation does not require any measures to address downside risks.”

Amid increasing concerns about the yen’s rise at that time, Fukui got votes from six Policy Board members, including himself, while the other three voted against his proposal, an unusually large number of nays for the BOJ.

The BOJ was carrying out the first round of quantitative monetary easing, under which its monetary policy target was the balance of commercial financial institutions’ current deposits at the central bank.

At the Oct. 9-10 meeting in 2003, the BOJ voted to raise the upper end of the target range by ¥2 trillion, to ¥32 trillion, while keeping the lower end unchanged at ¥27 trillion.

The bank made the monetary policy easing decision despite an upward revision to its basic economic view.

The day before the two-day meeting, the dollar plummeted to a fresh 34-month low below ¥110 in Tokyo.