Barclays (LSE:BARC)
Historical Stock Chart

From Apr 2019 to Apr 2024

TOKYO—The Bank of Japan stood pat on policy Wednesday despite growing signs of trouble in the economy, opting to further examine whether the nation's price trends are faltering.

At a two-day policy meeting, the central bank's nine-member Policy Board voted 8-1 to leave its annual asset purchases—its main tool to beat deflation and generate inflation—at Y80 trillion ($665 billion).

BOJ Gov. Haruhiko Kuroda will explain the decision at a news conference starting at 0630 GMT.

The bank left unchanged its assessment of the economy, saying it "continues to recover moderately, although exports and production are affected by the slowdown in emerging economies."

In a sector-by-sector assessment the bank cut its view on business sentiment, saying it "has generally stayed at a favorable level, although somewhat cautious developments have been observed in some areas."

The bank is confronted with increasing pressure to ease policy further, as the economy hovers on the brink of recession and as inflation expectations weaken among companies, households and market professionals. Core inflation, adjusted for price changes, turned negative in August for the first time in over two years, drifting further below Mr. Kuroda's 2% target.

Speculation for early action has grown to such an extent that Goldman Sachs, J.P. Morgan Securities and Barclays had warned their clients of a possible surprise easing ahead of the latest meeting. Their baseline scenarios tip the central bank to escalate its easing measures at the next meeting scheduled for Oct. 30.

If the BOJ decides to act, the question will be whether it should do more of what hasn't worked well so far to produce 2% price growth, or try something new, people close to the bank said.

Barclays expects the central bank will increase its asset purchase target to up to Y110 trillion, in addition to halving the deposit rate on excess yen cash parked by commercial banks at the BOJ to 0.05%.

Write to Takashi Nakamichi at takashi.nakamichi@wsj.com and Megumi Fujikawa at megumi.fujikawa@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 07, 2015 02:05 ET (06:05 GMT)