Bank of Japan board members continued to agree to gradually adjust interest rates at their October policy board meeting, suggesting that chances for a December rate hike are slim, the meeting's minutes released Tuesday showed. "It was important that the BOJ explain carefully that the timing of any policy change depended on developments in economic activity and prices," the minutes said. The BOJ board members Oct. 13 voted unanimously to leave monetary policy steady, judging that current economic and financial conditions didn't warrant any imminent policy action. The decision was in line with market players' expectations as stable inflation here and uncertainty over the bottom of the U.S. economic slowdown didn't call for policy action. The board said that real interest rates are very low, compared with real gross domestic product growth. But they didn't see any imminent need to raise interest rates. The board members were in agreement that "accommodative financial conditions continued," judging from the drop in the yen, the decline in long-term interest rates and the rise in stock prices, the minutes said. One member said that the Lombard lending rate (the complementary lending facility), which now stands at 0.40%, is slightly too low. But he didn't call for raising the rate at the meeting. On financial market moves, one member said that the yen, in terms of the real effective exchange rate, had fallen to as low as around the time of the conclusion of the Plaza Accord in 1985. The minutes didn't touch on the so-called yen-carry trade transactions, but some members seemed to see the trades as a one sided-effect of the easy policy. Under yen-carry trade transactions, hedge funds and other investors borrow funds cheaply, exploiting low Japanese interest rates, and sell yen to invest in higher-yield financial instruments overseas for a profit. Some members said that "given the extremely accommodative financial environment, attention should be paid to various risks that might take hold if interest rates remain low for a long time regardless of economic activity and prices," the minutes said. Some members also said that firms' land transactions are clearly recovering, suggesting that the BOJ needs to pay more attention to the side effects of its easy policy. "Some economic data tended to fluctuate sharply and often deviated noticeably from underlying trends in the short term," the minutes said. This indicated that the BOJ's view on the economy will not be influenced by short-term or monthly data. The board members agreed that the BOJ must appropriately assess economic data. Representatives from the Ministry of Finance and the Cabinet Office preemptively pressured the BOJ not to raise the interest rates anytime soon. The MOF official said "it is important that the Bank maintains the current guidelines for money market operations and firmly supports the economy in order to ensure the sustainability of the economic recovery." The board continues to have an optimistic view about the effect of the U.S. economic outlook on the Japanese economy, saying that the possibility is high that the U.S. will have a soft-landing. The slowdown of the world largest economy remains mild. But many board members said that the BOJ must carefully watch whether U.S. inflationary pressures increase.