BOJ stands pat on policy, upgrades economic view
Japanese central bank cites stronger exports, domestic consumption
SHOTARO TANI, Nikkei staff writer
TOKYO -- The Bank of Japan on Tuesday announced it will keep its monetary policy unchanged. The central bank also upgraded its assessment of the Japanese economy for the first time in 19 months, encouraged by a pickup in domestic private consumption, exports and industrial production.
The BOJ's policy board voted 7-2 to continue applying an interest rate of minus 0.1% to some excess reserves held at the bank by financial institutions, as well as to aim to keep the yield on 10-year Japanese government bonds, or long-term interest rates, at around 0%.
To hold the rate at around 0%, the central bank will continue purchasing JGBs so that its outstanding holdings of the bonds increase by about 80 trillion yen ($681 billion) annually
As in the previous month, the bank said the Japanese economy "has continued its moderate recovery trend." However, it dropped the phrase "exports and production have been sluggish," effectively marking the first upgrade in the BOJ's assessment since May last year.
The decision was backed by what the bank saw as improvements in exports, private consumption and industrial production. In the previous month, the BOJ said exports were "more or less flat," but it now says they have "picked up." Similarly, the central bank also upgraded its view on industrial production and private consumption, painting a more bullish picture of the Japanese economy.