BoJ Keeps Stimulus Unchanged; Cuts Inflation Forecast
20 Luglio 2017 - 4:07AM
RTTF2
The Bank of Japan left its massive monetary stimulus unchanged
on Thursday and pushed back the timeframe to achieve its 2 percent
inflation target.
The bank has upgraded its growth forecasts as private
consumption and exports are expected to continue moderate
increasing trend.
The BoJ policy board, led by Governor Haruhiko Kuroda, voted 7-2
to retain the central bank's target of raising the amount of
outstanding Japan government bond holdings at an annual pace of
about JPY 80 trillion.
The BoJ board also voted to retain the -0.1 percent interest
rate on current accounts that financial institutions maintain at
the bank.
The central bank will purchase government bonds so that the
yield of 10-year JGBs will remain at around zero percent.
The bank said risks to both economic activity and prices are
skewed to the downside.
The growth outlook for the fiscal 2017 was upgraded to 1.8
percent from 1.6 percent and that for the fiscal 2018 was upgraded
to 1.4 percent from 1.3 percent. The bank maintained the fiscal
2019 projection at 0.7 percent.
As price growth has remained relatively weak, the inflation
projection for the fiscal 2017 was lowered to 1.1 percent from 1.4
percent and the outlook for the fiscal 2018 to 1.5 percent from 1.7
percent.
In the fiscal 2019, inflation is forecast to be 2.3 percent
instead 2.4 percent.
The timing for annual inflation to reach around 2 percent will
likely be around fiscal 2019, the bank said.
Even after today's downward adjustments, the Bank's inflation
forecasts for the current fiscal year remain too high and there is
little chance of hitting the 2 percent target next year either,
Marcel Thieliant, an economist at Capital Economics, said.
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