(Bloomberg) -- The Bank of Japan signaled it's getting closer to raising its interest rate for the first time since 2007 in its summary of opinions from last week's policy gathering, although authorities didn't hint at a consensus over the specific timing for the move.
Bank of Japan board members continued to discuss prospects for ending the negative rate policy at the Jan. 22-23 meeting, with some members indicating conditions that would allow that move are increasing.
“It seems that conditions for policy revision, including the termination of the negative interest rate policy, are being met,” one of nine board members said. The official cited the likelihood of better results in this year's annual wage negotiations and signs of improvement for the economy and inflation.
The yen strengthened and bonds fell as the summary of opinions added to the view that BOJ is getting closer to ending its negative policy rate.
Japan's currency rose as much as 0.3%, while 10-year bond yields rose over 4 basis points to 0.75%.
“The BOJ clearly indicated the commencement of groundwork for the tightening of monetary policy,” said Shoki Omori, a strategist at Mizuho Securities Co. “The removal of the negative interest rate policy is close, either in March or April.”
The summary came into market focus after Governor Kazuo Ueda indicated last week that the bank is edging closer to the end of world's last subzero rate at his post-meeting press conference.
Read more: IMF Urges BOJ to Prepare for Rate Hike in Case Inflation Flares
One board member was of the view that the bank needs a couple of months to gauge the effects of a New Year's Day earthquake that struck the nation's northwest region.
“After assessing the degree of macroeconomic effects of the Noto Peninsula Earthquake by monitoring its impact for about the next one or two months, the bank is highly likely to reach a point where it can normalize monetary policy,” the member said.
The members discussed the process of a potential exit, mulling everything from the sequence of unwinding measures to the buying of risk assets. One member pointed out that it would be natural for the bank to stop buying exchange-traded funds once the price goal is in sight.
One member suggested it's better to move before the Federal Reserve and European Central Banks shifts toward implementing rate cuts.
“Shifts in monetary policies of overseas central banks could reduce the flexibility of the Bank's monetary policy,” the member said. “Now is a golden opportunity.”
The bank delivers its next policy decision on March 19.
More stories like this are available on bloomberg.com
©2024 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.