Bank of Japan Defers Any Action to its End-October Comprehensive Review

October 5, 2012

The Bank of Japan had stretched quantitative stimulus by JPY 10 trillion to a JPY 80 trillion total at its September Policy Board meeting and will be publishing its semi-annual economic and inflation review after its meeting at the end of this month.  So this week’s in-between meeting always figured to be a wait-and-see affair, and so it was.  After deliberating for six hours and fourteen minutes on Thursday and Friday, officials released a statement that by a 9-0 vote retained the existing 0-0.25% interest rate target range and the quantitative stimulus of JPY 80 trillion.  The authorities, however, downgraded their economic assessment further to “activity is leveling off more or less” and promised to pay particular attention to exchange market developments.  The elevated yen for some time has been blamed for depressing exports, which are showing significant on-year declines.  Shipments during the first twenty days of last month, for instance, were 10% lower than a year earlier.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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