BOJ Boosts Transparency as Kuroda Pursues Unprecedented Easing

The Bank of Japan is increasing transparency around its decision-making process as Governor Haruhiko Kuroda takes the central bank into uncharted territory to reflate the world’s third-biggest economy.

The central bank will boost the frequency of reports it issues on the economy’s health and release details on policy board members’ individual assessments, it said in a statement on Friday. It will cut the number of board meetings to eight a year, in line with the U.S. Federal Reserve, from 14.

Central banks from Europe to the U.S. have taken steps in recent years to send clearer signals to investors on their views. At the same time, some have scaled back the frequency of their policy meetings. The BOJ’s transparency will improve with the new system, Kuroda said in Tokyo after the bank kept its unprecedented monetary easing unchanged.

“We will have more clarity on how hawkish or dovish the Bank of Japan is,” Yoshiro Sato, an economist at Credit Agricole SA, said in a report.

The Fed in 2011 began to hold post-policy meeting press conferences four times a year. The European Central Bank this year reduced the frequency of its monetary policy meetings to every six weeks from once a month, while Bank of England plans to change to eight meetings a year in 2016 from one a month.

“There were too many policy board meetings in Japan to begin with, compared to other central banks in industrialized nations,” said Mari Iwashita, chief market economist at SMBC Friend Securities Co. in Tokyo.

Risk Assessments

Under Japan’s changes to begin next year, the BOJ will release its outlook report on the economy and inflation every quarter instead of twice yearly. Those reports will also include forecasts and risk assessments of each board member, the BOJ said.

Four of the BOJ’s policy meetings will cover the outlook reports and four will update on developments in the economy and inflation. It will also release a summary of opinions presented at each meeting a week later.

The changes at the BOJ are unlikely to alter the outlook for monetary policy given still-subdued inflation and growth, with prospects for extra stimulus still on the table, said Marcel Thieliant, an economist at Capital Economics.

“While these changes will increase the transparency of the Bank’s decision-making process, they are unlikely to sway members’ views on the outlook for the economy and prices,” said Thieliant.

Kuroda last October boosted an asset purchase plan that he introduced in April 2013 to stamp out 15 years of deflation, giving the central bank room to buy all new bonds issued by the finance ministry. Inflation is far from its 2 percent goal.

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