Some members of the Bank of Japan's monetary policy committee believe they must gear up for the "next economic downturn" by cooperating better with the government on fiscal and other economic policies.
One member said in order to meet the inflation target, "further coordination of fiscal and monetary policy was necessary," according to minutes of the monetary policy meeting on Oct. 30 and 31.
Another member said it was "desirable" to lower the short-term policy interest rate to strengthen monetary policy easing.
Some members said a prolonged low interest rate environment was weighing on certain sectors of the economy, and the economy as a whole needs to be considered while making monetary policy decisions and not only the banks' business conditions.
Life insurance providers will take a hit due to the prolonged low interest rates "in maintaining the provision of insurance products such as whole life insurance and annuity insurance, for both of which there is strong public demand, and thereby might not fulfill its social responsibility," said one member.
Some policy makers pointed out that it was appropriate to consider revising the current forward guidance. Subsequently, the central bank at the same meeting kept its monetary policy unchanged and formally signaled rate cut in the cards with new forward guidance.
The bank said it expects short- and long-term interest rates to "remain at their present or lower levels as long as it is necessary" in order to keep inflation from veering away from its target.
Some members said crude oil prices and global financial markets were stable since their previous meeting in September amid expectations for progress in U.S.-China trade negotiations.
The central bank kept its monetary policy unchanged Dec. 19, in line with market expectations, saying it will continue expanding its monetary base until inflation exceeds its 2% target.