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Tuesday, June 28, 2022

The Bank of Japan stands out from the rest of the central banks and maintains its monetary policy

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The institution will pay attention to the impact of the development of the currency markets on the economy


The Bank of Japan (BoJ) has decided to keep its accommodative monetary policy unchanged despite the move towards more tightening by the rest of the major central banks in response to high inflation, although the Japanese institution has warned against paying particular attention to the foreign exchange market and its impact on the economy after the yen fell to a 24-year low against the dollar.

In this way, the company decided by a majority of 8 to 1 to continue to apply a negative interest rate of 0.1% to the companies’ accounts with the Bank of Japan, while continuing to buy government bonds indefinitely to maintain about 10 -year- bond yield to zero.

In fact, the only dissenting vote cast by Kataoka Goushi expressed a preference for “further tightening of monetary easing” by cutting short- and long-term interest rates to encourage companies to engage in active commercial fixed asset investment for the post-Covid-19 era. era, declared the central bank.

The Japanese issuing institute also unanimously decided to continue buying exchange-traded funds (ETFs) for as long as necessary at an annual rate of 12 trillion yen (86,040 million euros).

In its analysis, the Bank of Japan is confident that the Japanese economy will recover, but expects downward pressure from rising commodity prices due to factors such as the war in Ukraine.

Regarding inflation, he believes the CPI rate is likely to approach 2% due to the impact of rising energy and food prices.

On the other hand, the company has warned that there are still extremely high uncertainties for the Japanese economy, including the development of the Covid-19 at home and abroad, the development of the situation in Ukraine and commodity prices and foreign economies.

“In this situation, it is necessary to pay due attention to developments in the financial and foreign exchange markets and their impact on economic activity and prices in Japan,” the Bank of Japan said.

Source europapress.es

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