TOKYO – The Bank of Japan kicked off on Thursday its monthly meeting on monetary policy, in which it is expected to analyze the direction of the Japanese economy after the publication of a series of negative indicators, which could point to a slowdown.
In the meeting, which is set to continue until Friday, the nine members of the monetary policy board of the central bank are expected to keep intact the aggressive stimulus package which was launched at the beginning of 2013, according to Japanese analysts.
BoJ governor Haruhiko Kuroda has insisted on maintaining the stimulus program until they reach the objective of achieving a 2 percent inflation rate, a target which has remained out of reach for the world’s third biggest economy.
Apart from monitoring prices and effects of the measures promoting monetary easing, the board will also review a series of indicators published in recent weeks which have triggered concerns about the health of the Japanese economy.
Exports fell 5.2 percent in January compared to the month before, according to latest BoJ data, while the industrial production index dropped 3.7 percent during the same month, its third consecutive fall.
The Cabinet Office’s index of business conditions also registered its third monthly fall and reached levels not seen since 2013, which could point to a possible turning point for the economy, according to the official report.
Analysts have attributed the negative results largely to the slump in the economy of China, the biggest trade partner of Japan, and said that these trends could force the BoJ to scale down its forecast about results in exports and domestic industries.
Analysts close to the bank have said that in the beginning, this review would not affect the BoJ’s assessment of the state of the economy, which, according to the document approved by the bank in its January meeting, is in a phase of “moderate expansion.”
Other critical situations which are a matter of concern in Japan and are set to be discussed by the BoJ are the trade tensions between the United States and China and the uncertainty over the process of the United Kingdom leaving the European Union, after the British parliament again rejected a Brexit plan negotiated with Brussels by Prime Minister Theresa May.
The BoJ’s monetary easing policy is aimed at activating a corporate profit cycle, salary hikes and acceleration of domestic consumption in order to boost a sustained expansion of the Japanese economy.