Japanese Monetary Policy Not Changed

June 20, 2019

Following its scheduled monetary policy review, the Bank of Japan left its stance unchanged but observed weak industrial production, export demand, housing, and expected inflation. Amid escalating global uncertainties and ahead of a planned domestic sales tax hike, BOJ officials flagged a rising possibility of more easing in the future, but the credibility of that warning was tempered among investors by the belief that the central bank’s options are limited because the mounting damage to banks of prolonged massive stimulus. For now, the short-term central bank interest rate remains -0.1%, and its target for the 10-year JGB yield is zero percent, give or take 20 basis points. As has been the case for some time, two of the nine Board members – Harada andKataoka — prefer a more expansionary stance.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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