Tuesday, July 12, 2011

Bank of Japan Makes no Changes to Policy, Holds Rate at 0.10%

The Bank of Japan held its uncollateralized overnight call rate unchanged at a range of 0 to 0.1% by a unanimous vote.  The Bank also made no changes to its other monetary policy tools e.g. the 40 trillion yen asset purchase program.  The Bank said in its statement: "Japan's economic activity is picking up with an easing of the supply-side constraints caused by the earthquake disaster.  After declining sharply following the earthquake, production has recently shown clear signs of picking up with the easing of supply-side constraints."

The Bank of Japan also held its monetary policy interest rate unchanged in June this year.  Japan reported annual headline consumer price inflation of 0.3% in both May and April, meanwhile core inflation rose 0.6% in April, as Japan finally begins to see some positive inflation figures.  The Bank is forecasting real GDP growth of 0.2-0.6% in fiscal 2011, and 2.5-3.0% in fiscal 2012.


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