Tokyo, March 15 (IANS) The Bank of Japan (BOJ) on Tuesday announced it will not change its current monetary policy after launching negative interest rates on February 16.
The nine-member board approved, by a 7-2 vote, the plan to keep the benchmark rate for some commercial banks’ reserves at minus 0.1 percent, a measure implemented to prevent leveraging of capital and to stimulate credit, EFE news reported.
The board also agreed 8-1 to retain its massive asset-purchase program started in 2013, aimed at achieving a stable inflation rate of around 2 percent to spur growth.
BOJ will thus, continue to widen its monetary base by $705.5 billion annually.
The bank also pointed out that the rise in core consumer prices was still around zero percent owing to cheaper raw materials and that despite Japan continuing to experience an underlying inflation trend, “long term” expectations in this area have weakened recently.
Due to this development, the central bank pushed back in October 2015 the time frame for reaching its inflation target to end of 2016 or early 2017.
On the other hand, the central bank said Japan’s economy continues on the path to moderate recovery despite weaker exports and industrial production due to the slowdown of emerging markets, a document said.
Corporate capital investment continues to grow moderately and consumption has been solid, said the text.
Moreover, the BOJ believes the recovery of real estate investment has come to a standstill recently while public investment continues its moderate declining trend, although it is still at a very high level.