The Bank of Japan kept its longstanding easy credit policy unchanged on Tuesday, saying it will watch price and wage trends before raising its negative benchmark interest rate. The BOJ policy decision was widely expected. However, investors and analysts believe the central bank is tip-toeing toward a shift due to price increases that have left inflation above its 2% target. The U.S. dollar gained against the Japanese yen and stock prices surged after Tuesday\u2019s decision.<\/p>\n
The benchmark rate of negative 0.1% is meant to encourage banks to lend more and businesses and consumers to borrow more to spur the economy, the world\u2019s third-largest. The central bank also has purchased trillions of dollars worth of government bonds and other assets as part of its strategy of injecting more cash to spur growth as the Japanese population shrinks and grows older. Inflation has risen in Japan but at a much slower pace than in the U.S. and other major economies, most recently at about 3%. At the same time, the U.S. dollar has risen against the Japanese yen as rates were raised to counter inflation that peaked at 9.1% in the U.S. That has undercut the purchasing power of the yen, raising costs for energy and other commodities.<\/p>\n
BOJ Gov. Kazuo Ueda has remained cautious about raising rates, saying that wage increases have lagged behind rising prices and that the target level of inflation may not be sustained. The central bank\u2019s policy statement said that housing investment remained weak and government spending was flat. \u201cWith extremely high uncertainties surrounding economies and financial markets at home and abroad, the bank will patiently continue with monetary easing,\u201d the BOJ said in a statement.<\/p>\n
The central bank is reviewing its strategy, but \u201cwill not rush to exit\u201d its current stance of \u201cquantitative easing,\u201d Oxford Economics said in a research note. \u201cThe exit will be delicate, requiring many years and comprehensive policy measures in conjunction with the government to ensure a smooth and stable process,\u201d it said.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Bank of Japan kept its longstanding easy credit policy unchanged on Tuesday, saying it will watch price and wage\u2026<\/p>\n","protected":false},"author":28,"featured_media":17758,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[186],"tags":[5495,2892,5500,5498,5499,312,5501,5502,359,5496,149,5497,5503,95],"class_list":["post-17756","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world","tag-bank-of-japan","tag-banks","tag-bonds","tag-borrowing","tag-economic-growth","tag-economy","tag-exchange-rates","tag-falling-yen","tag-inflation","tag-interest-rates","tag-japan","tag-lending","tag-rising-us-dollar","tag-usa"],"reading_time":"2 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/17756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/comments?post=17756"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/17756\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media\/17758"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media?parent=17756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/categories?post=17756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/tags?post=17756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}