Bank Of Japan Keeps Monetary Stimulus Unchanged
15 März 2019 - 2:52AM
RTTF2
The Bank of Japan held its monetary policy steady on Friday and
predicted that the economy is likely to continue its moderate
expansion despite slowing overseas growth hurting exports and
production.
The policy board of the BoJ voted 7-2 to purchase government
bonds so that the yield of 10-year JGBs will remain at around zero
percent.
The board maintained interest rate at -0.1 percent on current
accounts that financial institutions maintain at the bank.
The BoJ will conduct purchases of Japanese government bonds in a
flexible manner so that the outstanding amount will increase at an
annual pace of about JPY 80 trillion.
The decision was widely expected by economists.
The bank pledged to maintain the current extremely low interest
rates for an extended period of time, in the light of uncertain
economic outlook and prices, including the impact of the
consumption tax hike scheduled for October this year.
The BoJ said it will continue with "Quantitative and Qualitative
Monetary Easing with Yield Curve Control" policy to attain the
inflation goal of 2 percent and maintain that target in a stable
manner.
The bank reiterated that it will continue expanding the monetary
base until the year-on-year rate of increase in the observed CPI
exceeded 2 percent and stayed above the target in a stable
manner.
Japan's economy was expanding moderately, although exports and
industrial production have shown some weakness due to the impact of
slowing overseas growth.
Concerning the economic outlook, the bank observed that the
Japanese economy is expected to continue its moderate expansion,
even though the slowdown in overseas economies has taken a toll for
the time being.
With the world economy on course for the weakest quarter of
growth in two years, there is a possibility for the Japanese
economy to contract again in the first quarter, Darren Aw, an
economist at Capital Economics, said.
The economist expects that policy rates to be kept near zero at
least until the end of 2020.
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