Tokyo The currency watchdogs in Tokyo decided on Friday that the controversial interest rate curve control policy would remain in place. They are aiming for targets of minus 0.1 percent for short-term interest rates and zero percent for the yield on ten-year government bonds.
The central bank has initiated a review of its years of ultra-loose monetary policy. But this should take a year to a year and a half. According to central bank head Kazuo Ueda, a quick departure from the long-standing lax line is out of the question. The weakening growth of the global economy harbors risks for Japan’s economy. Added to this is the uncertainty as to whether wage growth in the country will continue, he said recently.
The third largest economy in the world had a tailwind at the beginning of the year. Gross domestic product (GDP) grew by an annualized 2.7 percent from January to March. But the upswing is not reaching all areas: While the country’s hotels, restaurants and other service companies have experienced a business boom since the easing of the Covid containment measures, the industry is struggling with weakening demand in some cases.
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