The Bank of Japan said it will tighten control of information about policy decisions after questions were raised about a possible leak of officials’ discussions just before last month’s announcement of negative interest rates.
The central bank will limit the use of communication devices during meetings and request assistance from government representatives for tighter information control at policy gatherings, the BOJ said in an email statement Wednesday.
The central bank did not find evidence of a leak of information from its Jan. 29 discussions, it said, after reviewing security camera footage and investigating workers, executives and related government officials.
Gov. Haruhiko Kuroda has been asked repeatedly by lawmakers about a possible leak since he surprised markets in adopting the negative rate policy at the meeting. The BOJ investigation followed a report by the Nikkei news service that was released while Kuroda and the board were in the closing stages of the two-day policy meeting. The report said the BOJ was discussing introducing negative interest rates.
The media report sparked sharp moves in the yen and the Japanese stock market before the official announcement of the policy change was made at 12:38 p.m.
“It would be extremely undesirable” to cause a disruption in financial markets if a policy decision is reported right before an announcement, the BOJ said in the statement Wednesday. “The BOJ will take all possible measures to ensure” information control.
This isn’t the first time the BOJ’s handling of insider information has been called into question.
On all three occasions from March 2006 to March 2007, changes of policy or word that then-Gov. Toshihiko Fukui had proposed them leaked out while policy board meetings were in progress.
Also, news that the central bank in February 2001 had proposed lowering the official discount rate was reported in advance of the announcement by news organizations including Nikkei English News.
Other measures the BOJ announced Wednesday include limiting journalists’ access to parts of the BOJ building and government offices on the second day of policy meetings, and imposing stricter limits on who is made aware of policy meeting discussions before the announcement, the bank said.
Atsushi Takeda, an economist at Itochu Corp. in Tokyo, said late Wednesday that it appears the BOJ is taking “appropriate action” on the issue of potential leaks of information.
“This is a crucial problem. It could have a huge impact on financial markets,” he said. “If the BOJ can’t control inside information properly, it shakes the BOJ’s credibility. If the leak is true, it is a matter of grave significance.”