A summary of opinions of the Bank of Japan (BOJ) meeting in December showed that even though policymakers had decided to keep the interest rates low, they did discuss other matters.
Some of the topics that were under discussion included the growing possibility that the risk of returning to deflation could finally be eradicated due to higher wages.
As mounting inflationary pressures are drawing more and more attention, this will keep market expectations high about huge stimulus being phased out by the Bank of Japan in the next year.
This would be when the dovish Governor of the BOJ, Haruhiko Kuroda, steps down from his position in April.
The summary of the December meeting of the Japanese central bank was released on Wednesday, which showed that one member believes that price acceleration is not just limited to goods and services.
A member said that the inflationary momentum in Japan could be increasing. While the BOJ stuck to its ultra-easy monetary policy in its December 19th to 20th meeting, it did deliver a shock to markets.
The bank decided to make changes to its bond yield control, which enables interest rates in the long-term to rise more.
The board comprises a total of nine members and several of them said that the aim of the decision was to improve the sustainability of the current stimulus program.
The summary showed that members believed this tweak would address some of the side effects of the program and was not a step towards ending the ultra-lose monetary policy.
However, the discussions that took place at the board were focused on the changes that are happening in the price outlook of Japan.
This could lay the foundation for the withdrawal of the stimulus next year when Kuroda departs from his position.
Some members said that they had still not managed to hit the 2% inflation target of the central bank sustainably, and others said that there was a change in the stance of companies about raising prices and wages.
One member said that the consumer prices in the country were reaching a level that had been seen before the deflationary period in Japan.
They were referring to the growing ratio of items that have recorded a rise in their prices. The member said that this could be an achievement of progress that could prevent deflation from happening in the country again.
Another opinion indicated that Japan could see high wage increases, as corporate profits are quite robust and an increasing number of companies are willing to pay more for overcoming intensifying labor shortages.
There were also those in the BOJ that warned about the impact of extended easing. They said that the functions of the bond market had deteriorated and if this continues, monetary easing could be a problem.
Another opinion said that if the Bank of Japan was to exit its existing monetary policy, it would have to assess if investors are prepared for such a move, as they have gotten accustomed to the low rates.