BoJ Minutes: Moderate Economic Recovery To Continue

Members of the Bank of Japan's monetary policy board stated that the country's economic recovery is continuing at a moderate pace, minutes from the bank's meeting on January 30 and 31 revealed on Wednesday.

"Exports had picked up, mainly led by automobile-related exports to advanced economies and IT-related ones to emerging economies in Asia, with the effects of the slowdown in emerging economies diminishing. They would likely continue their pick-up trend for the time being," the minutes said.

At the meeting, the bank voted to maintain the central bank's target of raising the amount of outstanding Japan government bond holdings at an annual pace of about JPY 80 trillion.

The BoJ board also decided to maintain the -0.1 percent interest rate on current accounts that financial institutions maintain at the bank.

The central bank will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.

Policymakers unanimously decided to extend the deadlines for applications for some of its lending programs by one year.

"The Policy Board also decided, by a unanimous vote, to extend by one year the deadlines for new applications for such measures as the Fund-Provisioning Measure to Stimulate Bank Lending, the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth, and the Funds-Supplying Operation to Support Financial Institutions in Disaster Areas affected by the Great East Japan Earthquake and by the Kumamoto Earthquake," the minutes said.

In the Outlook for Economic Activity and Prices, the bank said the economy is likely to continue growing at a pace above its potential through fiscal 2018.

For the current fiscal, the bank projected 1.4 percent growth instead of 1 percent forecast in October.

The BoJ upgraded its growth outlook for fiscal 2017 to 1.5 percent from 1.3 percent and that for the fiscal 2018 to 1.1 percent from 0.9 percent.

The bank expects inflation move closer to 2 percent as the aggregate supply and demand balance improves and medium- to long-term inflation expectations rise.

The BoJ kept its forecast for inflation unchanged for both fiscal 2017 and 2018. For the fiscal 2017, inflation is expected to be 1.5 percent and 1.7 percent in the fiscal 2018.

"The year-on-year rate of change in the CPI (all items less fresh food) was likely to increase from about 0 percent and become slightly positive, reflecting developments in energy prices," the minutes said.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Forex News

Original Article