BoJ Minutes note rising downside risks for Japan’s economy, rates must be kept low

The Bank of Japan (BoJ) board members shared their views on the monetary policy outlook on Friday, per the BoJ Minutes of the May meeting.     

Key quotes

Many members said must carefully scrutinise each nation’s trade policy and its development given heightening downside risks to economy, prices.
A few members said BOJ must maintain current very low real interest rates to underpin economy.
One member said BOJ had no choice but to wait-and-see until US trade developments stabilised.
One member said must scrutinise whether recent tariff developments could prod Japan firms to embark on excessive cost-cuts, curb wage and investment.
Members agreed it was appropriate for BoJ to continue raising interest rates in accordance with improvements in economy, prices if BOJ’s forecasts materialise. 
A few members said it was appropriate to continue raising interest rates as BOJ’s projections point to achievement of its 2% inflation target.
One member said likelihood of Japan’s underlying prices falling back again is small.
One member said BOJ may pause rate hike temporarily, but must stand ready to hike rates again depending on U.S. policy shifts.

Market reaction to the BoJ Minutes 

At the time of writing, USD/JPY was down 0.12% on the day at 145.25.