The Bank of Japan (BoJ) expressed that the bank's move in March is "different from the monetary tightening phase experienced in the United States and Europe," the BoJ's Minutes of its March meeting revealed.
The meeting's members also agreed that long-term interest rates should be determined by markets, adding that the impact on the economy due to the short-term rate rising to around 0.1% would most likely be limited. They also discussed the idea that the BoJ should "at some point in the future" reduce its bond-buying amount, stressing, however, that the bank must do so gradually so as to avoid causing any sharp volatility in the market. The meeting also touched upon the notion of "slowly but steadily" moving towards policy normalization "with an eye on economic and price developments."
The BoJ also stated that even though it is not a big risk at the moment, Japan's inflation could "overshoot."
