Summary of the Monetary Policy Meeting Minutes at the Bank of Japan - October 2024.

The Bank of Japan published the minutes of its previous monetary policy meeting held in October on Tuesday morning, where members of the Board of Directors shared their views on the outlook for monetary policy.

The key points from the Bank of Japan's meeting minutes in October were:

• The key interest rate remained at 0.25%.
• It is essential to take a cautious approach to monetary policy movements amid domestic and global uncertainty.
• If inflation trends align with expectations, the Bank of Japan may gradually raise interest rates, potentially reaching 1.0% by late fiscal year 2025; that is, by March 2025.
• One member of the Bank of Japan suggested gradually raising interest rates to 1.0% in the second half of fiscal year 2025 for better economic assessment.
• The Bank of Japan will continue to raise interest rates if the economy and prices move in line with expectations.
• Market pricing may be below appropriate levels based on economic and price expectations, along with monetary policy guidance.
• Predicting the path of interest rate hikes is challenging due to uncertainty about the transmission mechanism of interest rates and the neutral monetary policy in Japan.
• The Bank of Japan continues to direct policy appropriately in close coordination with the government.
• A representative from the Ministry of Finance at the Bank of Japan stated that the government will guide economic and financial policy, prioritizing pulling Japan out of deflation.
• Members agreed that Japan's consumption is likely to continue to increase modestly.
• A few members mentioned that wage growth is likely to remain high in next year's spring wage negotiations.