The Bank of Japan continues with its ultra-loose monetary policy and maintains the interest rate at -0.1%

MADRID, 22 Sep.

The Bank of Japan continues with its ultra-loose monetary policy and maintains the interest rate at -0.1%


The Policy Council of the Bank of Japan (BoJ) unanimously decided this Friday to maintain its ultra-loose monetary stance, with the reference interest rate at -0.1%, the same rate it has applied since January 2016, when entered negative territory for the first time in its history.

The institution led by Kazuo Ueda has also decided to continue purchasing the necessary amount of Japanese Government Bonds (JGB) without establishing an upper limit so that the yields of the 10-year Japanese public debt remain around 0%.

At the same time, it will continue to implement its government bond yield curve control policy, allowing Japan's 10-year bond yield to fluctuate within a range of around /- 0.5 percentage points from the target level.

In any case, the institution considers the upper and lower limits of this range "as references, and not as rigid limits," in its market operations, which is why it will offer to buy Japanese sovereign bonds with a 10-year maturity at a rate of 1% every business day through fixed rate purchase transactions, unless it is very likely that no offers will be presented.

"There are major uncertainties surrounding economic activity and prices in Japan, including the evolution of economic activity and prices abroad, the evolution of raw material prices and the behavior of domestic companies in setting prices. wages and prices," the institution says in a statement.

Given these circumstances, the Japanese Central Bank assures that it will pay "due attention" to the evolution of the financial and currency markets and their impact on economic activity and prices in Japan.

"With major uncertainties surrounding economies and financial markets at home and abroad, the Bank will patiently continue monetary easing while responding nimbly to developments in economic activity and prices, as well as financial conditions. In this way, it will try to achieve the price stability objective of 2% in a sustainable and stable manner, accompanied by salary increases," he underlines.

The Bank of Japan's monetary policy decision was made known on the same day that the Japanese Ministry of the Interior and Communications published inflation data for the month of August.

According to these data, the reference inflation rate in Japan, which excludes the impact of the price of fresh food, stood at 3.1% year-on-year, the same rate as in July.

In the case of the general inflation rate, the CPI moderated by one tenth in the eighth month of the year, from 3.3% in July to 3.2% in August.

For its part, the core inflation rate, which in addition to fresh food also excludes energy, remained at 4.3% in August, the same value as last May, when it reached its highest levels since 1981.

In the month of August, the price of food in Japan experienced a year-on-year increase of 8.6%, two tenths less than in July, while fresh food became more expensive by 5.3%, moderating by 1.2 points. the year-on-year rebound that they had registered in July.