Bank of Japan September meeting minutes: Members debated benefits of YCC

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© Reuters. A Japanese flag flutters atop the Bank of Japan building under construction in Tokyo© Reuters. A Japanese flag flutters atop the Bank of Japan building under construction in Tokyo

TOKYO (Reuters) – One Bank of Japan policymaker said the slope of the yield curve was not sufficient to achieve 2 percent inflation because there was excess supply of capital stock and because the government was due to raise the sales tax in 2019, minutes of the central bank’s Sept. 20-21 meeting showed.

This member said a further increase in demand was needed to achieve 2 percent inflation, the minutes showed on Monday.

In response, some members said it was necessary to avoid hampering the functioning of the financial system when pursuing easy policy.

The BOJ kept monetary policy on hold at the meeting but Goushi Kataoka, a new member of the policy board, dissented and argued against the central bank’s view that current policy is sufficient to meet its target.

At a subsequent meeting on Oct. 30-31, Kataoka argued that the BOJ should make clear its readiness to expand stimulus again if domestic factors delay achievement of its price target.

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