Bank Of Japan Maintains Massive Monetary Stimulus
19 Settembre 2018 - 8:02AM
RTTF2
The Bank of Japan maintained its ultra-loose monetary policy at
its September meeting after tweaking its stance in July.
The policy board voted 7-2 to purchase government bonds so that
the yield of 10-year JGBs will remain at around zero percent, the
BoJ said Wednesday.
The board retained the -0.1 percent interest rate 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 bank intends to maintain the current extremely low levels of
short and long-term interest rates for an extended period of time,
taking into account uncertainties regarding economic activity and
prices.
Regarding economic outlook, the bank said Japan's economy is
likely to continue its moderate expansion.
Inflation is likely to increase gradually toward 2 percent,
mainly on the back of the output gap remaining positive and medium-
to long-term inflation expectations rising, BoJ added.
The sales tax hike currently scheduled for next year will
probably result in a sharp slowdown in domestic demand, and the
board is starting to get jittery about the impact of the global
trade war on external demand, Marcel Thieliant, an economist at
Capital Economics, said.
With inflation set to remain well below the Bank's 2 percent
target, policy tightening therefore looks like a remote prospect,
the economist observed. The bank is likely to keep its policy rate
as well as its target for 10-year JGB yields unchanged beyond 2020,
Thielant added.
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