April 7, 2010, 11.23 am (Singapore time)
BOJ keeps rates on hold, says economy picking up
TOKYO - The Bank of Japan kept interest rates on hold on Wednesday and said the economy was continuing to pick up, but analysts say prolonged deflation is likely to keep government pressure simmering for further monetary easing.
'Japan's economy has been picking up, mainly due to improvements in overseas economies and various government policy steps, although it lacks a self-sustained recovery in domestic private demand,' the BOJ said in a statement announcing its unanimous decision to keep interest rates on hold at 0.1 per cent.
The previous month the BOJ said Japan's economy was picking up.
The central bank maintained its commitment to keep monetary conditions very easy and said it was important to pull Japan out of deflation.
The BOJ also said that when assessing price trends, it should exclude the effect of a government move to scrap high school fees from April. That move is seen shaving around 0.5 percentage point off annual inflation figures, which could reinforce the view that deflation will persist in Japan.
Governor Masaaki Shirakawa will hold an embargoed news conference, with his comments expected to come out sometime after 4:15pm (3.15pm Singapore time).
Markets had widely expected the BOJ to stand pat after it eased its ultra-loose policy further last month by doubling the size of a cheap fund supply tool put in place in December, following a drumbeat of government pressure.
A weakening yen and stable bond yields had offered the BOJ little justification to expand monetary easing.
Despite some bright signs in the economy, market players expect the BOJ to ease policy some time later this year as the government, hobbled by a ballooning fiscal debt, continues to lean on the BOJ to support a fragile economy. -- REUTERS
BOJ keeps rates on hold, says economy picking up
TOKYO - The Bank of Japan kept interest rates on hold on Wednesday and said the economy was continuing to pick up, but analysts say prolonged deflation is likely to keep government pressure simmering for further monetary easing.
'Japan's economy has been picking up, mainly due to improvements in overseas economies and various government policy steps, although it lacks a self-sustained recovery in domestic private demand,' the BOJ said in a statement announcing its unanimous decision to keep interest rates on hold at 0.1 per cent.
The previous month the BOJ said Japan's economy was picking up.
The central bank maintained its commitment to keep monetary conditions very easy and said it was important to pull Japan out of deflation.
The BOJ also said that when assessing price trends, it should exclude the effect of a government move to scrap high school fees from April. That move is seen shaving around 0.5 percentage point off annual inflation figures, which could reinforce the view that deflation will persist in Japan.
Governor Masaaki Shirakawa will hold an embargoed news conference, with his comments expected to come out sometime after 4:15pm (3.15pm Singapore time).
Markets had widely expected the BOJ to stand pat after it eased its ultra-loose policy further last month by doubling the size of a cheap fund supply tool put in place in December, following a drumbeat of government pressure.
A weakening yen and stable bond yields had offered the BOJ little justification to expand monetary easing.
Despite some bright signs in the economy, market players expect the BOJ to ease policy some time later this year as the government, hobbled by a ballooning fiscal debt, continues to lean on the BOJ to support a fragile economy. -- REUTERS