ibusinesslines.com
ibusinesslines.com December 14, 2018


BOJ keeps lax monetary policy, forecasts steady growth

27 April 2017, 03:55 | Kelvin Horton

BOJ keeps lax monetary policy, forecasts steady growth

Euro Yen Are Primed for BoJ ECB Rate Decisions

The Bank of Japan kept its stimulus policies unchanged while lowering its inflation forecast, underscoring that any exit from its unprecedented monetary easing remains far away.

"To be fair, the tax cuts were massive", said Vishnu Varathan, a senior economist at Mizuho Bank.

Analysts say the bank is trying to support Japan's economy by maintaining easing measures. "Global economic prospects have brightened but the BOJ would be cautious of giving out any signs it may withdraw its stimulus as doing so could trigger an unwelcome yen rise", said Mari Iwashita, chief market economist at SMBC Friend Securities.

The BOJ kept its policy unchanged, as expected, but Governor Haruhiko Kuroda conceded that public perceptions of future price rises remained subdued, suggesting the central bank will significantly lag its USA and European peers in exiting its massive stimulus programme.

Japan's economy grew by 1.2% on Y-o-Y basis, in the October to December quarter, as per the data revised in last month.

SLOW TO EXIT At Thursday's meeting, the BOJ is widely expected to leave unchanged its commitment to guide short-term interest rates at minus 0.1 percent and the 10-year government bond yield around zero percent through aggressive asset purchases.

"Japan's economy has been turning toward a moderate expansion", the BOJ said a quarterly review of its long-term economic and price projections, compared with the previous month's view that it was "improving moderately as a trend".


"We expect inflation to accelerate toward 2 percent but now, inflation is around zero percent", Kuroda told reporters after the policy meeting.

"Talking about a specific exit strategy now would cause undue confusion in markets", he said.

In its quarterly economic outlook report, the central bank upgraded Japan's GDP forecast for the 2017-18 fiscal year to 1.6%, from the 1.5% projected in January, signalling its confidence that a pick-up in overseas demand will help sustain an export-driven recovery.

The BOJ, which has an inflation target of 2%, cut its inflation projection for fiscal 2017 to 1.4% from 1.5%.

The pressure for change would however land on inflation expectations.

But core consumer prices for February rose just 0.2 percent from a year earlier, as weak private consumption has discouraged companies from raising prices. BOJ Gov. Haruhiko Kuroda said last week that the accommodative policy and asset purchases will continue for some time because inflation is "quite sluggish", underscoring how far the BOJ lags behind its counterparts in the USA and Europe.

Kuroda's comments come as the U.S. central bank raises interest rates while speculation swirls that the European Central Bank is considering backing off its own stimulus by turning off the taps on massive bond-buying or raising borrowing costs from historic lows.



Other News

Trending Now

James Harden's leadership fuels revamped Houston Rockets to West semifinals
The Houston Rockets completed a gentleman's sweep of the Oklahoma City Thunder with a 105-99 home victory in Game 5. A new coach in Mike D'Antoni, who practically gave him a jet pack to go with a license to thrill.

Trump's Approval Rating Hits 41 Percent In Latest CBS Poll
Even 29 percent of Democrats, who may disagree with Trump's agenda, believe he's holding true to his campaign promises. The poll also asked USA adults their thoughts on the Obama administration's alleged spying on the Trump campaign.

'Better Than Anticipated': Trump on Results of Tillerson's Visit to Russian Federation
Rex Tillerson and Sergei Lavrov met in Moscow on Wednesday. "There is a low level of trust between our two countries", he said. Never mind that Obama ultimately agreed with Trump about the risks of involving the U.S.in yet another Middle Eastern war.

Senators Briefed on 'Grave' North Korean Threat
A US guided-missile submarine also docked in South Korea this week. "We remain open to negotiations to towards that goal". He dismissed North Korea's threats to sink the aircraft carrier and its strike group, saying "if it flies, it will die".

Trump commemorates Holocaust, re-affirms allegiance with 'friend' Israel
We urge the president and his administration to act to protect targeted communities against hate crime and discrimination". Addressing survivors in attendance at the Capitol, Mr Trump called each one a "beacon of light". "We just won't", he said.

DOE Allows US LNG Exports to Non-FTA Countries Amid Output Hike
USA exports are expected to reach 8.1 Bcf/d by 2022, with the USA rising to around 17% of the global LNG market. Cheniere Energy began exporting a year ago from its Sabine Pass terminal in Louisiana.

Star Wars: Episode IX release date set for May 2019
Mark your diary in big blue texta and an Olaf smiley face for the most anticipated animated sequel in recent memory, Frozen 2 . The Han Solo standalone film is slated to hit the theaters on May 25, 2018 and will be helmed by Phil Lord and Chris Miller.