TOKYO: Japan’s central bank revised down inflation forecasts on Tuesday (Jul 31), making only minor tweaks to a monetary policy that has so far…
TOKYO: Japan’s central bank revised down inflation forecasts on Tuesday (Jul 31), making only minor tweaks to a monetary policy that has so far fallen short of lifting prices and boosting the world’s third-largest economy.
There was widespread speculation in the run-up to the Bank of Japan’s two-day meeting that it would adjust its ultra-loose policy, seeking to offset the effects of negative interest rates and its massive bond and asset buying.
But the bank offered only marginal adjustments, introducing some flexibility, and revised down further its inflation forecasts through fiscal 2020.
The BoJ has struggled for years to reach the 2.0 inflation rate thought necessary to turbocharge Japan’s economy, and has defended its decision to maintain its monetary easing even as other central banks tighten policy.
At a press conference, BoJ Governor Haruhiko Kuroda acknowledged that the inflation goal would not be met in the next few years, but declined to give a new timeline.
«Like other central banks, we do not indicate detailed schedules,» he said.
«Maintaining the momentum will lead to achieving the 2.0 per cent target as early as possible. I think that the momentum towards the 2.0 per cent is firmly maintained.»
Analysts said the bank was standing by its easing policy and the shifts were intended to shore up the programme by offsetting negative side effects.
«Despite the adjustment, the statement indicates the Bank of Japan is still sticking to the status quo,» said Masakazu Satou, senior analyst at Gaiame Online.
