The Japanese central bankers continue to pursue a course that is in contrast to that of their colleagues in Europe and the USA.
(Photo: Reuters)
Tokyo Japan’s central bank continues to buck the global tightening trend, keeping the reins extremely loose despite rising inflation and the yen’s sharp slide. As expected, the Bank of Japan (BOJ) left short-term interest rates at minus 0.1 percent on Thursday. The central bank said it wants to keep the yield on ten-year government bonds around zero percent.
The Japanese central bankers are thus continuing to pursue a course that is in contrast to that of their colleagues in Europe and the USA. Although prices are also rising in Japan, inflation is mainly driven by high energy prices and is also significantly lower than in the West. The BoJ expects a price increase of 2.3 percent for the fiscal year running until March 2023. So far, the central bankers had assumed 1.9 percent.
“Uncertainty in Japan’s economy is very high,” the BOJ said. “We need to keep a close eye on movements in the financial and foreign exchange markets and their impact on the economy and prices.”
According to some economists, Japanese consumers tend to limit their consumption when prices rise. This could limit inflationary pressures, which is why the BoJ is in no hurry to adjust its monetary policy. BoJ governor Haruhiko Kuroda recently indicated that, despite the weakness of the yen, the reins are unlikely to be tightened for the time being.
Top jobs of the day
Find the best jobs now and
be notified by email.
More: Inflation and the euro crisis: That’s why the Governing Council of the ECB is having a historic meeting today