Bank of Japan keeps policy steady, remains upbeat on economy

The Bank of Japan kept monetary policy steady on Thursday despite growing signs of strength in the economy, signalling that it was in no rush to edge away from crisis-mode stimulus with inflation still distant from its 2.0 per cent target.

In a widely expected move, the BOJ maintained the 0.1 per cent interest it charges on a portion of excess reserves that financial institutions park at the central bank.

At the two-day policy meeting that ended on Thursday, it also maintained its yield target for 10-year Japanese government bonds around zero per cent.

“Japan’s economy is expanding moderately,” the BOJ said in a statement announcing the policy decision.

The decision on maintaining interest rate targets was made by an 8-1 vote.

Board member Goushi Kataoka dissented to the decision, arguing that the likelihood of inflation accelerating towards 2 per cent was low.

BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision.