HIGHLIGHTS-BOJ minutes: Need to watch yen, stock impact on econ

(For more stories on the Japanese economy, click [ID:nECONJP])

TOKYO, Aug 13 (BestGrowthStock) – Some Bank of Japan board members
believe there is a need to watch the impact of the yen’s rise
and stock market decline on the economy, minutes of the bank’s
July 14-15 meeting showed on Friday. [ID:nTKZ006487]

At the July meeting, the central bank raised its economic
growth forecast for the current fiscal year and kept its
benchmark interest rate at 0.1 percent.

The central bank held off on new policy steps to combat a
stronger yen at its following meeting that ended on Tuesday,
saving its limited firepower in case the yen rises sharply and
threatens Japan’s fragile economic recovery. [ID:nTOE67900S]

Following is a summary of the minutes:

FOREX

— With regard to the recent appreciation of the yen and
fall in Japanese stock prices, some members said that the
effects on Japan’s economic activity should be examined closely.

— Some members noted that amid the increased risk aversion
among investors around the world, stock prices continued to be
unstable not only in Japan but also in overseas markets, and the
yen had appreciated partly because investors had no better
alternative than to buy it as a safe asset.

FISCAL

— Some members said that long-term interest rates in Japan
had declined significantly through early July, mainly reflecting
a decrease in long-term interest rates abroad.

— One member said that, although fiscal consolidation had
recently become a hot topic of discussion in Japan, there had
not been any significant changes in risk premiums so far.

— Some members commented that due attention should continue
to be paid to whether the declining trend in long-term interest
rates would be prolonged.

For the full text of the minutes, go to the BOJ website:
http://www.boj.or.jp/en/type/release/teiki/giji/g100715.pdf
(Reporting by Tetsushi Kajimoto; Editing by Edmund Klamann and
Joseph Radford)

HIGHLIGHTS-BOJ minutes: Need to watch yen, stock impact on econ