Bank of Japan Keeps 0.0-0.1% Target Interest Rate Range

June 14, 2011

Following a six hour nine minute meeting over June 13 and 14, the Policy Board

  1. Kept the same ultra low target range for overnight money by unanimous vote.
  2. Created a parallel JPY 5 trillion credit line for equity investments to further encourage financial institutions to meet credit demands. The size of the facility is modest, equal to around $6-1/4 billion.  Loans at 0.1% can last as long as four years, given allowance for one rollover.  This new credit line supplements an already existing JPY 3 trillion framework.
  3. Upgraded its outlook slightly.  Although Japan continues to face downward pressure on the production side related to the Sendai earthquake, it has shown “some signs of picking up.”

Click here to read the latest Policy Board statement and here for my preview of this week’s meeting with background information and history of the BOJ policy rate.  Seven Policy Board meetings have been scheduled in the second half of 2011: July 11-12, August 4-5, September 6-7, October 6-7, October 27, November 15-16, and December 20-21.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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