Minutes of BoJ’s December 17-18 meeting showed some discussions on the topic of exchange rates. Some members noted that “U.S. dollar continued to depreciate moderately against the yen as part of its depreciation trend against a wide range of currencies, and that developments in the foreign exchange and other financial markets continued to warrant attention.”

One of these members added “recent improvement in market sentiment had been partly driven by expectations for vaccines” and the member was closely monitoring stocks market developments. One member noted ” future developments in the U.S. credit market warranted attention, since market participants had been actively conducting risk-taking activities.”

On policy, “members agreed that the Bank would closely monitor the impact of COVID-19 and not hesitate to take additional easing measures if necessary.” Most members shared the view that, “as for policy rates, it would expect short- and long-term interest rates to remain at their present or lower levels.”

Full minutes here.

BoJ Governor Haruhiko Kuroda told the parliament today, “the BOJ will continue its ultra-easy policy so improvements in corporate profits and the economy prop up wages and gradually accelerate consumer inflation.”

“We remain vigilant to the risk prices may shoot up before wages begin to rise, or how (rising raw material costs) could hurt smaller firms. We must keep an eye out on these risks, while maintaining our current easy monetary policy,” Kuroda said.

Meanwhile, Prime Minister Fumio Kishida said, “it’s desirable to create an environment in which companies can pass on rising costs and raise wages, so that increasing consumption spurs economic growth and inflation.”