Japan keeps rates low
(28 January 2010 – Japan) Japan’s central bank voted unanimously this week to continue its fight against inflation, leaving its policy target interest rate unchanged at 0.1 percent.
At the end of the two day meeting, the board released its decision to continue the low interest rate into its 14th month; saying that beating deflation was a critical challenge.
The central bank maintained its current projection that the country’s economy would see three years of deflation as it tries to recover from the global financial crisis.
However, the central bank did indicate that predicted price falls may be less severe than previously thought.
Japan plunged into the recession in 2008, due to the collapse in its exports markets, before returning to growth in the second quarter of 2009.
Falling consumer prices, high public debt and weak domestic demands are continually concerning the central bank’s decision makers.
The Bank of Japan said in a statement, that the bank recognises it is a critical challenge for Japan's economy to overcome deflation and return to a sustainable growth path with price stability.
The country’s banks are also in agreement, Societe Generale’s, chief of Asia economy, Glenn Maguire said that they expect Japan to remain in deflation until the end of 2011, even if the Japanese economy continues to grow robustly through this period.
The central bank maintained its current projection that the country’s economy would see three years of deflation as it tries to recover from the global financial crisis.
However, the central bank did indicate that predicted price falls may be less severe than previously thought.
Japan plunged into the recession in 2008, due to the collapse in its exports markets, before returning to growth in the second quarter of 2009.
Falling consumer prices, high public debt and weak domestic demands are continually concerning the central bank’s decision makers.
The Bank of Japan said in a statement, that the bank recognises it is a critical challenge for Japan's economy to overcome deflation and return to a sustainable growth path with price stability.
The country’s banks are also in agreement, Societe Generale’s, chief of Asia economy, Glenn Maguire said that they expect Japan to remain in deflation until the end of 2011, even if the Japanese economy continues to grow robustly through this period.
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