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Risk of yen rise noted

Jiji Press TOKYO (Jiji Press) — Some Bank of Japan policymakers at their September meeting expressed concerns about the yen’s potential appreciation on safe-haven buying partly reflecting growing tensions over North Korea, according to minutes of the meeting released by the central bank on Monday.

At the Sept. 20-21 meeting, the nine members of the BOJ’s Policy Board shared the view that investors’ risk aversion generally has been seen “only in part,” as evidenced, for example, by the fact that U.S. and European stock prices have been at high levels.

Meanwhile, some warned that more attention needs to be paid than before to the possibility that market participants’ sentiment “would change suddenly,” apparently bearing in mind a potential heightening of geopolitical risks.

The bank “would change the guideline for market operations as appropriate” if the yen advances as a result of a narrowing in the interest rate gaps between Japan and other nations or a rise in geopolitical tensions, a few members said.

At the meeting, the board decided by an eight-to-one vote to keep unchanged the BOJ’s current ultraeasy monetary policy, including guiding 10-year Japanese government bond yields to around zero percent.

Casting the sole dissenting vote was Goshi Kataoka, one of the two newest members of the board.

Monetary easing effects gained from the current yield curve are “not enough” for the BOJ to reach its goal of realizing 2 percent inflation around fiscal 2019, a member believed to be Kataoka said, suggesting that the bank needs to take additional easing steps.

But most members agreed that it is “appropriate for the bank to persistently pursue powerful monetary easing” under the current easing regime, according to the minutes.Speech

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