The Bank of Japan left its monetary policy unchanged and raised its outlook for local consumption and global growth, reflecting policymakers’ confidence that the export-driven economic recuperation was spreading and beginning to pick up pace.
In a widely expected decision, the BOJ retained its pledge to steer short-term interest rates at minus 0.1 percent and the ten-year Japanese government bond yield new zero under its yield curve control policy.
BOJ also retained a loose promise to keep bolstering bond holdings at an annual rate of 80 trillion yen. While the BOJ argues it still sees the need to buy bonds at a significant rate, majority of analysts anticipate the bond buying initiative to hit a wall with the central bank owning over 42 percent of the market.
The central bank’s statement also struck a more upbeat tone than that of the prior meeting in April, when the BOJ noted that consumption showed resiliency.
Recognizing the increasing clues of recovery in emerging economies, BOJ said that global economies were continuing to expand at a moderate pace in general. The view was more optimistic compared to back in April, when it noted some weaknesses in emerging economies.
The BOJ reiterated its overall assessment of Japan’s economy to state that it was transitioning toward a moderate expansion.
The material has been provided by InstaForex Company – www.instaforex.com