Apr 26, 2019 (Japan Times) - The Bank of Japan told investors it would keep interest rates at superlow levels for at least one more year, indicating a time scale for anticipated rate stability for the first time and seeking to dispel uncertainty over its commitment to ultraloose policies as the economy comes under fresh pressures.
The bank’s decision to give more specific policy guidance to financial markets comes amid signs that weaker global demand and Sino-U.S. trade tensions are taking an increasing toll on Japan’s export-reliant economy.
The move puts the BOJ in line with the Federal Reserve and the European Central Bank, which have been forced to pause efforts to scale back crisis-mode policies due to heightening uncertainty over the global economic outlook.
“The BOJ intends to maintain the current extremely low levels of short-term and long-term interest rates for an extended period of time, at least through around spring 2020,†it said in a statement announcing its decision to keep policy settings steady.
Previously, the BOJ had not offered specifics on how long it would maintain very low rates, saying only that it would be “for an extended period of time.â€
BOJ Gov. Haruhiko Kuroda said the central bank was ready to adjust policy swiftly if necessary to sustain momentum needed for the economy to achieve its 2 percent inflation target. “It’s likely to take some more time to hit our target,†Kuroda told a news conference. “The economy is maintaining momentum to achieve our price target. But that momentum lacks strength.â€
In fresh projections released Thursday, the BOJ slightly cut its economic growth and inflation forecasts. It now sees growth of 0.9 percent in the next fiscal year beginning in April 2020, down from 1.0 percent projected in January but still above the expectations seen in a recent Reuters poll of economists.
