Bank of Japan Leaves Policy Unchanged

September 6, 2011

The Policy Board as expected announced no further policy changes after this month’s meeting.  The vote was unanimous.  A statement released on the central bank web site projects a moderate recovery in October-March, powered by exports and restoration of capital stock damaged in the earthquake.  Core CPI inflation is now running at around zero, a percentage point below the going notion of price stability. 

The last target interest rate cut made in March right after the earthquake set the overnight uncollateralized interest rate to zero to 0.1%, and officials do not intend to raise that until price stability is restored.  The last augmentation of quantitative easing was an increment of JPY 10 trillion  made at the August 4th policy meeting, and it is currently being implemented.

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

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