Japan Keeps Monetary Stimulus Unchanged
07 October 2015 - 12:30PM
RTTF2
The Bank of Japan refrained from adding more monetary stimulus
on Wednesday despite fears of looming recession as the slowdown in
emerging economies hurts exports and production.
The Policy Board of the BoJ governed by Haruhiko Kuroda decided
by an 8-1 majority vote to maintain its target of raising the
monetary base at an annual pace of about JPY 80 trillion.
Takahide Kiuchi proposed to lift the monetary base by about JPY
45 trillion annually.
The BoJ observed that the slowdown in emerging economies
affected exports and production. Exports and industrial production
have been more or less flat, the bank noted.
Policymakers reiterated its optimistic stance that the economy
will continue recovering moderately.
Nonetheless, in the semi-annual forecast to be released on
October 30, the bank is widely expected to downgrade its growth
outlook. The bank will also update its inflation forecast.
The decline in oil prices heavily weigh on the bank's ability to
achieve its 2 percent inflation target by the next summer.
Excluding fresh food, core consumer prices dropped 0.1 percent
in August, which was the first drop since the bank deployed its
stimulus.
The BoJ had earlier expanded the stimulus in October 2014, when
a decline in crude prices exerted pressure on its ability to
achieve inflation target.
Although the policy statement provided no clear indications that
additional stimulus is imminent, the bank will announce more easing
at its end-October meeting, Marcel Thieliant, an economist at
Capital Economics, said.
BoJ Governor Haruhiko Kuroda is set to hold his customary press
conference. The markets await indications about further easing,
with some hoping an announcement as early as this month.
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