BOJ keeps monetary policy unchanged

December 21, 2017

Tokyo- The Bank of Japan decided to leave its monetary policy unchanged at a two-day Policy Board meeting that ended Thursday.

The nine-member board decided, by a vote of eight to one, to continue guiding 10-year Japanese government bond yields to around zero and maintain the policy rate of minus 0.1 pct applied to part of commercial financial institutions' current account deposits at the central bank.

The BOJ will keep buying JGBs to boost its holdings by roughly 80 trillion yen a year.

"Japan's economy is expanding moderately, with a virtuous cycle from income to spending operating," the bank said in a statement, using the same wording as when the Policy Board held its previous monetary policy meeting in late October.

The decision to keep the monetary policy unchanged means that the Japanese central bank will end 2017 without taking a further easing step throughout the year, unless something unexpected happens by the year-end. So far, the bank has carried out easing at least once in a year since Governor Haruhiko Kuroda took office in 2013.

The Policy Board unanimously voted to keep unchanged the guidelines for the BOJ's purchases of assets other than JGBs, such as exchange-traded funds.

In the statement, the Japanese central bank said private consumption in Japan "has been increasing moderately, albeit with fluctuations," upgrading its assessment from late October, when it noted that private consumption "has increased its resilience."

The bank said business fixed investment in the country "has continued on an increasing trend with corporate profits and business sentiment improving." Jiji Press