TOKYO – Japan’s central bank retained on Tuesday its aggressive monetary stimulus policy and its price and economic forecasts, following a two-day meeting.
The Bank of Japan in 2013 had launched an aggressive monetary easing program to achieve two percent inflation, although a decline in crude oil prices and a global economic slowdown forced it to delay the deadline and activate additional measures, including a negative rate of -0.1 percent for bank deposits and a control of the yield curve to maintain around zero percent long-term rates.
Since the Consumer Price Index (CPI) remains well below the goal the BoJ wants to achieve by 2019, the bank is reluctant to lower its stimulus measures like the European Central Bank and the United States Federal Reserve had done recently.
The sustained growth of the Japanese economy over the last few quarters and a slow but steady rise in inflation has also helped revive the debate over the BoJ normalizing its flexible monetary policy.
BoJ confirmed the strong economic growth Japan has witnessed in the last few quarters in its quarterly report released in Tuesday’s meeting and said it expects the country’s GDP to grow 1.4 percent in the current fiscal year that ends in March 2019, with inflation of 1.4 percent over the same period.
It also noted that the economy continues with its moderate expansion and that a virtuous circle has been activated between income and expenditure, and highlighted the moderate increase in domestic consumption and the growing trend of corporate capital investment.