BoJ Minutes: Japanese Economy Extends Moderate Expansion

Trading 05 nov 2018 Donner votre avis

Members of the Bank of Japan's Monetary Policy Board said that the country's economy was continuing its modest expansion at a satisfactory rate, minutes from the central bank's meeting on September 18 and 19 revealed on Monday.

Domestic demand is expected to continue on an upward trend, the minutes added, while annual inflation is predicted to maintain its gradual climb to the target of 2 percent.

"Although it would take time to achieve the 2 percent price stability target, it was appropriate to persistently continue with the powerful monetary easing under the current guideline for market operations as the momentum toward achieving 2 percent inflation was being maintained," the minutes said.

Downside risks to the Japanese economy include the unpredictability of U.S. policies, global protectionism and repercussions from Britain's exit from the European Union.

"Against the backdrop of uncertainties over trade policy, especially between the United States and China, and of the depreciation of some emerging economies' currencies induced by the plunge of the Turkish lira -- investors' risk sentiment had worsened," the minutes said.

At the meeting, the central bank retained the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

The bank also maintained its ultra-loose monetary policy so that the yield of 10-year JGBs will remain at around zero percent. The BoJ will conduct purchases of Japanese government bonds in a flexible manner so that the outstanding amount will increase at an annual pace of about JPY 80 trillion.

The bank intends to maintain the current extremely low levels of short and long-term interest rates for an extended period of time, it said.

"It will examine the risks considered most relevant to the conduct of monetary policy and make policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum toward achieving the price stability target," the minutes said.

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