Another board member said while the current arrangement already allows the BOJ to buy exchange-traded funds (ETF) flexibly, it was "worth looking for further ideas," the minutes showed on Tuesday.
The debate suggests that tweaks to its ETF purchases will be among key components of the BOJ's policy review in March, reflecting growing concern among the policymakers over the rising cost and diminishing return of prolonged easing.
At the December rate review, the BOJ kept policy steady and unveiled a plan to conduct an examination of its tools in March to ensure they can withstand what is expected to be a prolonged battle to achieve its elusive 2% inflation target.
BOJ Governor Haruhiko Kuroda has said the review won't lead to an overhaul of the bank's policy framework like quantitative easing and yield curve control (YCC), which caps long-term interest rates around zero.
"A few members said the BOJ must seek ways to make its asset purchases flexible in response to market developments, taking into account the impact on market functions and the bank's financial health," the minutes showed.
A few members also said the central bank must enhance the sustainability of YCC including by tweaking its operations, so it can respond to economic shocks in a timely way, it showed.
With the hit to growth from COVID-19 stoking fears of deflation, the BOJ has been dropping hints it will consider scaling back its massive ETF buying and allowing long-term rates to deviate further from its 0% target.
(Reporting by Leika Kihara; Editing by Chang-Ran Kim and Sam Holmes)
By Leika Kihara
