Bank of Japan sticks to ultra-easy monetary policy

On the overall assessment of the economy, it said Japan’s economy has recovered moderately, but the pace of recovery in overseas economies has slowed. According to the national news agency Kyodo, Japan’s economy revitalization minister Yoshitaka Shindo, in a rare move, attended part of the meeting on Tuesday, a day after the chief of the nation’s most powerful…

TOKYO, Dec. 19 (Xinhua) — The Japanese central bank on Tuesday decided to maintain its ultra-loose monetary policy by sticking to ultra-low rates to ensure wage growth and stable inflation.

In its policy statement released after a two-day meeting, the Bank of Japan (BOJ) said that short-term interest rates will remain minus 0.1 percent.

The central bank also maintained its policy of guiding 10-year Japanese government bond yields to around zero percent under the program, while allowing the yields to rise above 1 percent to some extent as decided in the previous policy meeting in October.

Meanwhile, it will keep its purchase of exchange-traded funds and Japanese real estate investment trusts as needed, with annual upper limits of about 12 trillion yen (83.5 billion U.S. dollars) and about 180 billion yen, respectively.

On the overall assessment of the economy, it said Japan’s economy has recovered moderately, but the pace of recovery in overseas economies has slowed.

Despite market expectations to end its negative rate policy, it wrapped up the year with a dovish stance to ensure wage growth and stable inflation, sending the Japanese yen tumbling against the U.S. dollar in the forex market.

Market watchers speculated that the central bank might shift toward policy normalization by ending negative interest rates and scrapping its yield curve control after its chief, Kazuo Ueda, told the press earlier this month that policy maneuvering “will be even more challenging” going into the year 2024.

According to the national news agency Kyodo, Japan’s economy revitalization minister Yoshitaka Shindo, in a rare move, attended part of the meeting on Tuesday, a day after the chief of the nation’s most powerful business lobby Keidanren said the central bank should normalize policy “as soon as possible.”

The central bank said that it “will patiently continue” with monetary easing amid “extremely high uncertainties” surrounding global financial markets.

Globally, pauses from rate hikes were recently announced by the U.S. Federal Reserve, the European Central Bank, and the Bank of England. (1 U.S. dollar equals 142.61 Japanese yen) Enditem