BoJ keeps policy unchanged to achieve inflation target

| Updated: January 24, 2018 15:12:06

File Photo (Collected) File Photo (Collected)

Bank of Japan (BoJ) has kept monetary policy unchanged as it continues to grapple to achieve its lofty 2.0 per cent inflation target.

The central bank on Tuesday offered a more upbeat view on inflation expectations than three months ago, signalling its conviction a strengthening recovery will gradually push price growth to the target.

But BoJ Governor Haruhiko Kuroda will likely seek to dispel market speculation of an early withdrawal of stimulus by reminding investors at his post-meeting briefing that inflation remains distant from his target, reports Reuters.

The bank maintained its 1.4 per cent economic growth estimate for the year beginning in April and the 0.7 per cent projection for the following year.

The board meeting of the central bank kept its price forecasts that project inflation to hit 2.0 per cent around the fiscal year ending in March 2020.

The BoJ said while Japan’s economy was expected to expand moderately, it will maintain its massive stimulus programme for as long as needed to hit its inflation target.

Naomi Muguruma, senior market economist said, “The fact the BOJ kept its growth and price projections unchanged suggests it is in no mood to normalise policy, despite rising market speculation it could do so.”

The country’s economy expanded for the seventh straight quarter in July-September, its longest uninterrupted stretch of growth since 1994 and stock prices are at their highest in 26 years.

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