Friday, May 20, 2011

Bank of Japan Holds Overnight Interest Rate at 0-0.10%

The Bank of Japan maintained its uncollateralized overnight call rate at a range of 0 to 0.1% by a unanimous vote.  The Bank's assessment of the Japanese economy was pessimistic: "Japan's economy faces strong downward pressure, mainly on the production side, due to the effects of the earthquake disaster."  but also noted the economy "is expected to return to a moderate recovery path from the second half of fiscal 2011 as supply-side constraints ease and production regains traction."  Japan reported core consumer price deflation of -0.1% in March, with core CPI rising 0.2% month on month.


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