By Leika Kihara

TOKYO, Reuters – Bank of Japan policymakers remained firm in their determination to maintain massive monetary stimulation, despite some signs of improvement in low-inflation environments, as minutes of the March policy meeting revealed on Monday.

A number of members of the board, including nine, said that some large companies raised their wages, while more firms eagerly passed higher raw material costs on to the households. This may have an effect on inflation pressures, according to the minutes.

One member pointed out that Japan saw its consumer prices rise the fastest of all major developed economies in the global inflationary cycle. This meant that there was always the possibility for inflation to spiral higher as price increases continue.

However, most members of the board warned that the Ukraine crisis would increase risks for Japan’s economy and keep inflation under control.

Some members said in the minutes that Japan wasn’t in an inflationary situation like the United States or the United Kingdom.

According to them, “It was thus important that the BOJ continue with monetary ease to support the economy’s recovery from this pandemic.”

According to minutes, one member suggested that the BOJ may need to protect against any price declines in the second half of fiscal 2022 due uncertainty about the future global economic outlook and the commodity prices.

These remarks highlight a strong market view that the BOJ will continue to be an outsider in the global shift toward tighter monetary policies, without any sign of wages rising.

The Monday data revealed that March real wage growth was the lowest in three months. It is an indication that wages weren’t increasing enough to compensate for rising living costs.

The BOJ kept its large-scale stimulus policy at the March 17-18 session. The BOJ maintained its massive stimulus at the April 17-18 meeting. However, they raised this year’s inflation forecast but remained steadfast in maintaining ultra-low interest rate and clear guidance.

A lot of analysts believe that Japan will see core consumer inflation rise to 2% by April, mainly due to rising fuel prices. The BOJ stated that it will not tighten its policy unless cost-push inflation results in wider price increases and higher wages.