Some members said that consumers' inflation expectations were rising, reflecting the ongoing rise in the price of daily necessities, and this warranted attention, some members said at the April 8-9 policy meeting, according to the minutes released today in Tokyo. A few members said rising prices have damped consumer sentiment.
Since the meeting, the central bank cut its growth forecast and shelved a policy of gradually raising interest rates. Governor Masaaki Shirakawa told parliament yesterday that costlier energy and raw materials will erode corporate profits and household incomes and that may force companies and consumers to pare spending, slowing Japan's longest postwar expansion.
The central bank dropped a call for gradual rate increases in its twice-yearly outlook on April 30 and cut its estimate for this fiscal year's expansion to 1.5 percent from 2.1 percent. It said consumer prices excluding fresh food will climb 1.1 percent, raising its inflation projection from 0.4 percent.
The Bank of Japan has kept borrowing costs unchanged since February 2007, when it doubled the overnight lending rate to 0.5 percent. The rate remains the lowest in the industrialized world.
The International Monetary Fund said this week that the central bank's policy represents a wait-and-see attitude. That's the appropriate stance to safeguard growth.
No comments:
Post a Comment