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4/25, 5:39 AM (Source: TeleTrader)
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BoJ to keep 'extremely low' interest rates

Bank of Japan stated on Thursday it intends to keep "extremely low levels of long- and short-term interest rates for an extended period of time, at least through around spring 2020." The bank argued it took into account uncertainties in economic activity and developments in overseas economies. It decided to keep a negative 0.1% short-term interest rate and purchase government bonds so that 10-year yields remain at around 0%. Purchases will continue so that the amount increases by about 80 trillion yen annually. The bank also decided to "make clearer its stance to persistently continue with powerful monetary easing" while monitoring the effects of the scheduled consumption tax hike and the movements of global economies.

According to the statement, Japan's economy is likely to continue expanding moderately, with the consumer price index (CPI) gradually moving toward 2%. However, BoJ predicted "it is likely to still take time" to achieve the price stability target. The board's median core CPI forecast was at 1.1% for fiscal 2019, 1.4% for 2020 and 1.6% for 2021. Meanwhile, the median real GDP was expected to be at 0.8% in 2019, 0.9% in 2020 and 1.2% in 2021.

Breaking the News / DJ