Bank of Japan Minutes Published

The policy board of the Bank of Japan have suggested that the Japanese economy is likely to follow a stable price growth curve over the next few weeks, according to the minutes of the last meeting.

The minutes, which were published today, reflected a commitment to maintaining monetary policy under the current economic climate, showing perceived stability within the Japanese economy.

The policy board maintained interest rates at 0.5% over the course of this month, with only one dissenting member in favour of raising rates by 0.25% points, feeling that further interest rate rises would calm price growth without hampering economic growth.

The minutes also reflected concern as to the future of the inflation situation, particularly with rising fuel costs likely to increase operating costs for businesses.

Similarly, the increasing cost of grain based foodstuffs is likely to prove a major factor in increasing inflation, as demand continues to far outstrip supply on a global scale, which could lead to further interest rate rises in the near future to calm the inflationary pressures.

Meanwhile, private investment in business enterprises is forecast to remain healthy and grow over the coming months, leading to widespread increases in personal income and consumer spending.

Manufacturing output within the economy remained strong over the last month, according to the minutes of the last policy meeting released today.

Ultimately, the short-term forecast for the health of the Japanese economy was well-perceived, despite the significant impact of the US housing market on other major world economies.

With growing incomes on a personal level, it is also estimated that domestic consumption will increase over the near future in order to close the gap on the heavily reliant export economy.

While the board noted that there was still a potential for widespread fallout from the sub-prime situation, it had yet to currently impact too heavily on the health of the economy.

Story link: Bank of Japan Minutes Published