Sept. BOJ Meeting Closely Watched for Possible New Easing

Tokyo, Aug. 16 (Jiji Press)--The next policy-setting meeting of the Bank of Japan, set for Sept-18-19, is drawing increased attention for possible fresh monetary easing measures after the yen's recent spike against major currencies. The yen's appreciation, which has been attributed to monetary easing by global central banks including in emerging economies, has fueled concerns over earnings at Japanese companies, raising the possibility of a pre-emptive easing by the BOJ. At the BOJ's previous two-day monetary policy meeting in July, Policy Board members expressed positive opinions about additional easing. One policymaker said, "The effects of the scheduled consumption tax hike and sudden market changes warrant careful vigilance so that the bank's monetary policy will not fall behind the curve," according to a summary of opinions released by the BOJ. The BOJ "will not hesitate to take additional easing measures if there is a greater possibility that the momentum toward achieving the price stability target will be lost," the central bank said in a statement issued after the meeting. Speaking to a press conference after the meeting, BOJ Governor Haruhiko Kuroda said, "We're more positive about (further) monetary easing than before." In global financial markets, concerns over a global economic slowdown grew again this month after U.S. President Donald Trump announced additional punitive tariffs on Chinese imports, prompting a sell-off in stock prices and causing the dollar to drop to levels close to 105 yen due to safe-haven buying of the Japanese currency. Next month, the European Central Bank will hold a policy meeting, on Sept. 12, with market participants forecasting a further lowering of its negative interest rates. Speculation is growing of additional interest rate cut by the U.S. Federal Reserve at its Federal Open Market Committee meeting on Sept.17-18, after the U.S. central bank's the first rate cut in over 10 years in the July FOMC meeting created the global easing trend. If the ECB and the Fed decide to carry out further easing and the BOJ stops short of taking any fresh measures, the yen may strengthen further. Increased exchange-traded fund purchases or a further expansion of its negative interest rate policy is tipped by market experts as a possible fresh easing measure by the BOJ. The BOJ will face a tough decision on the next move, as there are also strong worries about side effects from fresh easing measures under its already ultraeasy monetary policy, analysts said. END