At their mid-December meeting the nine policy board members of the Bank of Japan (BoJ) looked at the question of a desirable monetary policy framework once the bank ends its current super-loose or quantitative easing policy, minutes of the meeting showed. The minutes, released today, showed that one unidentified member favored "indicating a desirable rate of inflation, from the viewpoint of providing an anchor for economic agents expectations regarding future developments in economic activity and prices and contributing to the stable formation of expectations in financial markets." Another member however argued that adopting inflation targeting "could impair the flexibility of monetary policy." This member added that if the target was set at too high a range "it could cause a rise in long-term interest rates via an increase in the expected inflation rate or risk premiums." Others members noted that as the economy was still only in the process of achieving sustainable growth and price stability it would be difficult at this point to determine and announce a desirable rate of inflation for the medium to long term. At the same meeting, policy members Atsushi Mizuno and Katsutoshi Fukuma jointly proposed cutting the outstanding balance of current account deposits held at the BoJ from "around 30 to 35 trln yen" to "around 27 to 32 trln yen," the minutes showed. Mizuno abandoned his previous suggestion for a reserve level of 25-30 trln. The two argued it would be appropriate to cut the target range immediately, citing the continued decline in liquidity demand from financial institutions and the need for the BoJ to "encourage the formation of interest rates based on the market mechanism as much as possible to ensure the smooth termination of the quantitative easing policy in the future." But at the end of the meeting, the nine policy board members voted to retain the existing target range by a 7-2 vote and to continue monitoring economic conditions in relation to the BoJ's quantitative easing policy. The BoJ has said it will keep the present super loose monetary policy until three conditions for changing it are all met. They are that the year-on-year change in the national core CPI remains above zero for a prolonged period; that there is no sign of it again slipping below zero; and that the economy is growing steadily. BOJ officials included governor Toshihiko Fukui have indicated that conditions for an end to the policy may be in the offing as soon as the start of the next fiscal year in April. Politicians, including the Prime Minister, cautioned recently that a quick end to the policy may be premature given signs of stubbornly persistent deflation.