Thursday, July 12, 2012

Bank of Japan leaves call rate unchanged

    The Bank of Japan, as expected, held its key overnight call rate steady at 0-0.1 percent, and said Japan's economy was improving moderately but global financial markets remained on edge due to the euro area's debt problem.
    "As for the outlook, Japan's economy is expected to return to a moderate recovery path as domestic demand remains firm and overseas economies emerge from the deceleration phase," the bank said in a statement, adding that inflation rate was expected to remain zero percent.

    "Regarding risks to the economic outlook, there remains a high degree of uncertainty about the global economy, including the prospects for the European debt problem, the momentum toward recovery for the U.S. economy, and the likelihood of emerging and commodity-exporting economies simultaneously achieving price stability and economic growth," it added.
    The Bank of Japan said overcoming deflation remained a critical challenge and it adjusted its asset purchase program. The bank said it would raise its purchase of short-term discount bills by about 5 trillion yen and then reduce the amount offered in fixed-rate market operations by the same amount. 


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