(Bloomberg) -- Some Bank of Japan board members were skeptical of the potential merits of releasing a rate path projection similar to the Federal Reserve’s dot plot when authorities discussed the idea during their September meeting, minutes from the gathering showed.
While one of nine board members suggested that releasing a rate forecast might be worth consideration, a few members seemed to have shot down the idea by stressing the importance of reiterating the bank’s policy stance, the minutes released Wednesday showed.
“Even if the bank provided numerical projections of the policy interest rate, the projections would inevitably range quite widely and therefore wouldn’t likely lead to effective communication,” one of the members said, the minutes showed.
The BOJ’s efforts to telegraph its policy path came under fire after the board raised borrowing costs in July, a move that surprised markets and helped trigger a global market crash. The Nikkei 225 fell by the most in its record. BOJ watchers are watching to see how their signaling is received in the market as more than 80% of BOJ watchers anticipate another rate hike by January.
In a Bloomberg survey last month, some 40% of 50 economists said the BOJ could improve its communications by releasing its own version of a dot plot, while 36% said it wouldn’t be effective. Another 24% said it’s hard to tell.
“A few members pointed out that it was desirable that the bank avoid as much as possible having a period in which there’s no dissemination of information,” the minutes showed, echoing the views expressed by Governor Kazuo Ueda in a speech last month.
The minutes also illustrated that BOJ board members are closely monitoring the outlook for the US economy. At the latest policy meeting held last week, the BOJ added a line highlighting its vigilance over the US economy to a section of its statement regarding policy guidance. The board held the benchmark rate at 0.25% at the meeting.
With uncertainties heightened, it’s “appropriate for the bank to monitor developments in overseas economies and market developments for the time being and make further adjustments to the degree of monetary accommodation when such uncertainties ebbed,” one member said.
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