The New Framework for Policy Board Meetings on Monetary Policy

December 26, 1997
Bank of Japan

The Bank has been conducting a comprehensive review of the monetary policy decision-making process in view of the aims of the new Bank of Japan Law, which will come into effect on April 1, 1998. Revisions to be made include the commencement of regular Policy Board meetings on monetary policy (Monetary Policy Meetings) and publication of minutes, both of which are to be realized before the new law comes into force. With the recent finalization of government ordinances regarding the implementation of the new law, the Policy Board today decided the new framework of Monetary Policy Meetings set out in the Annex, which will be put into effect in January 1998.

Regularly scheduled Monetary Policy Meetings and publication of minutes are essential to improving the transparency of policy decision-making process, which is one of the most important aims of the new Bank of Japan Law. The Bank believes that the new framework is fully consistent with this aim, and hopes it will contribute to ensuring the credibility of monetary policy management both in the financial markets and among the general public. We at the Bank are strongly determined to continue making every effort to fulfill the goals laid out in the new law.

Annex : On the Monetary Policy Meetings

The Bank of Japan has decided to hold regular Policy Board meetings on monetary policy under the following new framework.

(1) Name

Monetary Policy Meeting (MPM)

(2) Frequency

Twice a month in principle (around the 10th and 25th of the month)

(3) Announcement of the meeting schedule

Schedules will be announced at the end of each quarter, i.e., at the end of March, June, September, and December, for the six months following the month of the announcement. MPMs in January-June 1998 will be held as in the Appendix (scheduled dates for April-June are subject to change).

(4) Matters to be decided

1. (a) Guidelines for money market operations.
2. (b) The level of the official discount rates.
3. (c) Changes in the reserve requirement ratio, and other related matters.

(5) Announcement of MPM decisions

MPM decisions, including decisions not to change policy, will be announced immediately after each MPM.

(6) Publication of the Monthly Report of Recent Economic and Financial Developments

The Monthly Report of Recent Economic and Financial Developments will be published two business days after the first MPM of the month. Accordingly, the publications of Monthly Economic Review and Quarterly Economic Outlook will be abolished.

(7) Publication of minutes and transcripts of MPMs

Minutes -- summaries of discussions -- will be submitted for approval to the Policy Board at the second MPM following the MPM concerned (about a month later). They will be released on the third business day after they have been approved by the Policy Board.

Transcripts -- detailed records of discussions -- will be released after a period of time which the new Policy Board, to be established under the new Bank of Japan Law, deems appropriate.

Appendix : Scheduled Dates of Monetary Policy Meetings in January -June 1998

Note: The schedule for April -June is provisional.