The Bank of Japan left monetary policy unchanged Thursday and maintained a pledge to keep ultra-low rates in place until at least spring 2020 amid persistent trade tensions between the U.S. and China.
And, Governor Haruhiko Kuroda signaled a readiness to ramp up stimulus should global risks, including trade, further cloud the economic outlook.
Japan’s central bank made no major edits to recent language around policy, the Wall Street Journal reported. Altered forward-looking policy views emerged from both the Federal Reserve and the European Central Bank in recent days. The ECB raised the possibility of easing interest rates, while the Fed struck key language about being patient with policy change.
Kuroda said the BOJ could combine interest-rate cuts with bigger asset buying if needed to keep the economy on track to achieve its 2% inflation target.
“If the economy loses momentum toward achieving our price target, we’ll of course consider expanding stimulus without hesitation,” he told a news conference, according to Reuters.
As widely expected, the BOJ maintained its short-term rate target at -0.1% and a pledge to guide 10-year government bond yields around zero percent. It also kept intact a loose pledge to keep buying government bonds so the balance of its holdings increase by roughly 80 trillion yen ($738 billion) per year.
Asian markets largely gained out of the shoot Thursday after the Fed indicated Wednesday it is ready to ease monetary policy if needed.
Japan’s Nikkei
NIK, +0.60%
stock index closed up 0.6%. Dollar-yen
USDJPY, -0.27%
was last earning ¥107.82 compared to ¥108.10 late Wednesday in New York.
The Fed left its key interest rate unchanged and signaled it’s unlikely to cut borrowing costs in 2019, but the central bank also left itself wiggle room by saying it would “closely monitor” the economy in light of waning inflation and growing “uncertainties.”
Source : MTV
