TOKYO (Reuters) - Bank of Japan board members agreed that consumer spending remains buoyant following an increase in the sales tax rate in April, due to a tight labor market and improving wages, minutes of the central bank’s April 7-8 meeting showed on Wednesday.
One member added that inflation could quicken from April as companies use the tax hike as an opportunity to pass on higher input costs, the minutes showed.
One member also said the front-loading of demand before the sales tax increase in April was larger than what preceded the last sales tax hike in 1997, reflecting the resilience of consumer spending.
At the April 7-8 meeting, the BOJ board voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen to 70 trillion yen ($590-690 billion) via purchases of government debt and risk assets.
At a subsequent meeting on April 30, the BOJ left policy unchanged and issued consumer price forecasts for fiscal 2016/17, which show it expects to comfortably meet its inflation target.
The central bank has stood pat since launching an expanded quantitative easing in April 2013, when it pledged to accelerate inflation to 2 percent in roughly two years via aggressive asset purchases in a county mired in deflation for 15 years.
Reporting by Stanley White; Editing by Edmund Klamann and William Mallard