Statement on Monetary Policy

June 15, 2012
Bank of Japan
Statement on Monetary Policy
1. At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan
decided, by a unanimous vote, to set the following guideline for money market
operations for the intermeeting period:
The Bank of Japan will encourage the uncollateralized overnight call rate to remain at
around 0 to 0.1 percent.
2. Overseas economies on the whole still have not emerged from a deceleration phase, but
have shown some, albeit moderate, improvement. In global financial markets, some
nervousness continues to be seen, mainly due to concern about the European debt
problem. Particular attention should therefore be given to developments in these
markets for the time being.
3. Japan’s economic activity has started picking up moderately as domestic demand
remains firm mainly supported by reconstruction-related demand. Public investment
has been increasing. Business fixed investment has been on a moderate increasing
trend with corporate profits improving. Against the background of improvement in
consumer sentiment, private consumption has continued to increase moderately due to
the effects of measures to stimulate demand for automobiles. Housing investment has
generally been picking up. Exports have shown signs of a pick-up. Reflecting these
developments in demand at home and abroad, production has started picking up
moderately. Meanwhile, financial conditions in Japan have continued to ease. On
the price front, the year-on-year rate of change in the CPI (all items less fresh food) is
around 0 percent.
4. As for the outlook, Japan’s economy is expected to return to a moderate recovery path
as domestic demand remains firm and overseas economies emerge from the
deceleration phase. The year-on-year rate of change in the CPI is expected to remain
at around 0 percent for the time being.
5. Regarding risks to the economic outlook, there remains a high degree of uncertainty
about the global economy, including the prospects for the European debt problem, the
momentum toward recovery for the U.S. economy, and the likelihood of emerging and
commodity-exporting economies simultaneously achieving price stability and
economic growth. Regarding risks to the price outlook, careful attention should be
paid to future developments in international commodity prices and in medium- to
long-term inflation expectations.
6. The Bank recognizes that Japan’s economy faces the critical challenge of overcoming
deflation and returning to a sustainable growth path with price stability. This
challenge will be met through efforts by a wide range of economic agents to strengthen
the economy’s growth potential and support from the financial side. Based on this
recognition, the Bank has been providing support to strengthen the foundations for
economic growth and pursuing powerful monetary easing. The Bank continues to
conduct monetary policy in an appropriate manner. The Bank will also do its utmost
to ensure the stability of Japan’s financial system, while giving particular attention to
developments in global financial markets.
Meeting hours:
June 14 : 14:00-16:14
June 15 : 9:00-11:47
Policy Board members present:
Masaaki Shirakawa (Governor)
Hirohide Yamaguchi (Deputy Governor)
Kiyohiko G. Nishimura (Deputy Governor)
Ryuzo Miyao
Yoshihisa Morimoto
Sayuri Shirai
Koji Ishida
(Others present)
June 14
From the Ministry of Finance:
Shinichi Sato, Deputy Vice Minister for Policy Planning and Co-ordination
From the Cabinet Office:
Kenji Matsuyama, Vice-Minister for Policy Coordination (14:00-16:14)
June 15
From the Ministry of Finance:
Yukihisa Fujita, Senior Vice Minister of Finance (9:00-11:38,11:43-11:47)
From the Cabinet Office:
Katsuyuki Ishida, Senior Vice Minister for Cabinet Office(9:00-11:38,11:43-11:47)
Release of the Monthly Report of Recent Economic and Financial Developments:
14:00 on Monday, June 18 (Japanese)
16:30 on Tuesday, June 19 (English)
— The English translation of the summary of the Monthly Report will be
released at 14:00 on Monday, June 18
Release of the minutes:
8:50 on Wednesday, July 18

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