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Japan: BOJ Decides to Keep Monetary Policy Unchanged |
| Source: |
yomiuri.co.jp |
| Source Date: |
Thursday, May 24, 2012 |
| Focus: |
ICT for MDGs
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| Country: |
Japan |
| Created: |
May 29, 2012 |
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The Bank of Japan decided to keep its monetary policy unchanged at a two-day Policy Board meeting that ended Wednesday.
The unsecured overnight call rate will remain in a range of zero to 1 percent, unchanged since October 2010.
The size of the central bank's fund for asset purchases and special liquidity supply operations remained at 70 trillion yen. At its previous monetary policy meeting in late April, the bank expanded the fund by 5 trillion yen from 65 trillion yen.
Wednesday's meeting was held at a time when financial markets are being rattled by renewed concerns over the European debt crisis, particularly in relation to the political turmoil in Greece arising from growing frustration with fiscal austerity.
But the Bank of Japan apparently thought it appropriate to continue scrutinizing economic developments before taking additional measures, while keeping a close eye on the possible adverse impact of the European crisis on the Japanese economy.
At a news conference after the meeting, BOJ Gov. Masaaki Shirakawa said the central bank makes its policy decisions after examining various scenarios.
"In the global financial markets, some nervousness has recently been seen" due chiefly to concerns over the European sovereign debt crisis, the central bank said in a statement issued after the two-day Policy Board meeting.
"Close attention should be paid to developments in these markets for the time being," the statement said. The nation's economic activity remains more or less flat, but it is "increasingly evident" that the economy is shifting toward a pickup phase, the bank said.
Production is showing some signs of improvement while exports have so far remained more or less flat, it said.
Private consumption is increasing moderately due to the effects of government measures to stimulate demand for automobiles, the bank said.
Looking ahead, the central bank said the economy "is expected to return to a moderate recovery path" as the pace of recovery in overseas economies is likely to pick up on the back of growth in emerging economies.
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