2018.08.0220:25:00UTC+00BoJ Minutes: Japan Economy Continues Moderate Expansion

Members of the Bank of Japan's monetary policy board said that the country's economy continues to expand at a moderate pace, minutes from the bank's June 14 and 15 meeting revealed on Friday.

The members added that the expansion is expected to continue, the minutes showed - although they pointed out that downside risks include erratic U.S. policy and the UK's withdrawal from the European Union.

"There had been a situation where investors' risk-taking stance had become cautious, as seen, for instance, in temporary declines in stock prices through end-May in many countries, mainly against the background of heightened uncertainties over political developments in southern Europe and of concern regarding the U.S. trade policy," the minutes said.

The members added that inflation expectations remain unchanged.

"The year-on-year rate of change in the CPI is likely to continue on an uptrend and increase toward 2 percent, mainly on the back of an improvement in the output gap and a rise in medium- to long-term inflation expectations," the minutes said.

At the meeting, the board decided to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

Governor Haruhiko Kuroda and his board members also decided by an 8-1 majority vote to hold its target of raising the amount of outstanding JGB holdings at an annual pace of about JPY 80 trillion.

The bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

"The Bank will make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target," the minutes said.