Fiscal credibility critical: BOJ board


Many Bank of Japan policymakers stressed the importance of maintaining fiscal management credibility to ensure stable interest rates and called on the government to promote fiscal consolidation, according to the minutes of their policy meeting last month.

During the meeting Aug. 7 and 8, many Policy Board members noted that the bank’s massive government bond purchases were “significantly restraining upward pressure on long-term interest rates” that stemmed from a rise in overseas interest rates and improving business sentiment.

But one member cautioned that “potential instability continued to exist in the bond market” and that attention should be paid to the effects of developments in domestic prices and U.S. interest rates, according to the minutes released Tuesday.