BOJ Keeps Policy Unchanged
October 07 2015 - 2:20AM
Dow Jones News
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)
Copyright (c) 2015 Dow Jones & Company, Inc.
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