TOKYO, Aug 8: The Bank of Japan kept monetary policy steady on Thursday and held off on revising up its assessment on the economy, opting to wait for more clues on whether the positive mood will nudge companies to increase capital expenditure.
As widely expected, the BOJ voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the central bank, at an annual pace of 60 trillion yen ($615 billion) to 70 trillion yen.
‘Japan’s economy is starting to recover moderately,’ the BOJ said in a statement, maintaining its assessment of the economy after revising it upward last month.
BOJ board member Takahide Kiuchi proposed that the central bank make its 2 percent inflation target a medium- to long-term goal, and commit to intensive easing in the next two years. This would differ from the BOJ’s current commitment to hit its inflation target in roughly two years.
Kiuchi’s proposal was rejected in an 8-1 vote.
BOJ Governor Haruhiko Kuroda will hold an embargoed news conference from 3:30 p.M. (0630 GMT) with his comments expected to come out any time after 4:15 p.M. (0715 GMT).
The BOJ stunned markets by offering an intense burst of monetary stimulus in April, pledging to double the supply of money in two years by boosting purchases of government bonds and risky assets.
In doing so, it switched its policy target from the overnight call rate to base money, a broad measurement of the amount of money the central bank pumps into the economy. ($1 = 97.6050 Japanese yen)
(AGENCIES)
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