Bank Of Japan Holds Rate Steady After Two Hikes
20 Settembre 2024 - 8:46AM
RTTF2
The Bank of Japan maintained its benchmark rate on Friday after
two hikes this year and signalled that the policy normalization
will continue but the further action will be data dependent.
In a unanimous vote, the Policy Board decided to maintain the
uncollateralized overnight call rate to remain at around 0.25
percent. This was the highest since late 2008.
The BoJ had ended its negative interest rate policy in March and
last raised the benchmark rate in July to the current level. The
bank has tightened the policy twice this year.
At the press conference, Governor Kazuo Ueda said the BoJ will
adjust the degree of monetary support if economic and price
forecasts are achieved.
Japan's monetary policy tightening contradicted with the stance
of other major central banks that resorted to easing this year.
This week, the US Federal Reserve slashed its benchmark rate by
a more-than-expected half a percentage point, which was the first
reduction in over four years. On Thursday, the Bank of England
maintained its bank rate at 5.00 percent after a quarter point
reduction in August.
In the statement, the BoJ said the economy has recovered
moderately, although some weakness has been in part. Further, the
bank upgraded its view on consumption, which it said has been on a
moderate increasing trend.
Capital Economics' economist Marcel Thieliant said the BoJ will
hike its policy rate once more by a quarter point at its October
meeting.
ING economists said the timing of the next hike remains
uncertain, but there is a chance of a hike in December.
Earlier in the day, data from the Ministry of Internal Affairs
and Communications showed that Japan's consumer price inflation
rose to 3.0 percent in August from 2.8 percent in July.
Core inflation that excludes fresh food rose to 2.8 percent from
2.7 percent in July. Over the next few months, the restart of the
utility subsidy programme in September and the usual price
increases in October may cause inflation figures to fluctuate, ING
economists said.
They said in September, inflation is forecast to ease quite
meaningfully to the mid-2 percent range as the government
re-introduces the temporary energy subsidy programme for the
summer.
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