The Bank of Japan said Thursday This kind of can be holding its monetary policy steady, as inflation can be still far via the targeted 2 percent despite a growing economy.
At the end of its two-day policy meeting, the central bank said This kind of can be maintaining its short-term interest rate at minus 0.1 percent as well as the target for the 10-year government bond yield at zero percent.
“Japan’s economy can be expanding moderately,” the BOJ said in a statement.
The decision to keep monetary policy unchanged was reached by a 8 to 1 vote, with board member Goushi Kataoka as the sole dissenting voice.
Kataoka argued in which the likelihood of inflation reaching its 2 percent target can be low as well as the central bank should commit to additional easing if progress to achieve the inflation target can be delayed.
yet the BOJ said in its statement in which inflation can be “likely to continue on an uptrend” on the back of an improvement within the output gap as well as a rise in medium- to long-term inflation expectations.
Japan’s core consumer cost index rose 0.8 percent in October via a year ago, following a 0.7 percent increase in September. Its economy, the third-largest within the earth, beat estimates to grow at an annualized 2.5 percent within the three months to September.
Analysts were not surprised by the central bank’s decision on Thursday, yet had differing views on how long Japan will keep its loose monetary stance. A poll by Reuters found in which most economists expect the central bank to withdraw stimulus via 2018.
Marcel Thieliant, senior Japan economist via Capital Economics, said there were concerns about the sustainability of maintaining a loose monetary policy for a prolonged period. He said low rates may depress bank profits, weaken banks’ capital ratios as well as reduce lending.
Despite in which, Thieliant said he expects Japan to leave policy unchanged at least until the end of 2019.
“We don’t think in which these concerns are valid as well as we think in which weak cost pressures will continue to dominate the outlook for monetary policy,” he wrote in a note after the Discharge of BOJ’s latest monetary policy statement.
BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. local time (0630 GMT) to explain the policy decision.