Bank Of Japan Maintains Monetary Policy Unchanged
Following the conclusion of a 2-day monetary policy meeting, the Bank of Japan maintained status quo position with respect to its monetary policy. The Monetary Policy Board led by Governor Haruhiko Kuroda opted to persist with its policy of increasing the monetary base at an annual pace of 60-70 trillion yen despite cautioning of a reduction in demand and risk to economic growth due to the sales tax hike that came into effect in April.
The decision was adopted by an unanimous vote. The central bank continued to hold its economic assessment by repeating that the domestic economy is continuing to recover moderately as trend. At the same time, the bank indicated that demand has been hurt by the front-loaded increase before the tax hike. Among the changes observed in the commentary on growth was on public investment, which was termed as having leveled off at a high level.
The inflation commentary was also maintained unchanged. Going forward, the central bank expects the economy to continue a moderate recovery, as a trend, and the annual inflation, excluding the effects of the consumption tax hike, to be around 1.25 percent for some time. There was a dissension with respect to the time frame for the quantitative and qualitative easing, with the majority of the view that the measures have to be persisted as long as the 2 percent price stability target is maintained in a stable manner. Meanwhile, board member Takahide Kiuchi, who dissented, called for a time frame of about 2 years for the easing measures.
News are provided by InstaForex.
