TOKYO (AFX-ASIA) - The Bank of Japan does not need to increase its purchases of long-term government bonds due to the under-subscription by banks in market operations, monetary policy-board members said at their May 17-18 meeting.
"Many members said that this shortfall ... had not caused problems in achieving the 5 trln yen target for the outstanding balance of current accounts at the bank," the minutes of the meeting said.
"These members said that there was thus no need at present to increase outright purchases of long-term government bonds, which was within the framework of the Policy Board's decision on March 19."
One member said the bank should suggest it will not increase purchases under any circumstances, "as this might cause the public to pay an undue degree of attention to whether or not the bank would increase outright purchases".
Another said close examination is needed of the effectiveness of increasing outright purchases to help meet the target for the outstanding balance of current accounts, as well as the likely impact on financial markets.
Members agreed that the bank should monitor the extent that its monetary easing measures permeate into the economy, developments in the U.S. economy and information technology-related demand and progress in structural reforms.
They said the bank should maintain its policy as the economy was in line with expectations and the effects of the easing measures were starting to be observed in financial markets.