Wednesday, 16 July 2008

BoJ, BoC leave rates unchanged

The Bank of Japan left interest rates unchanged yesterday. From AFP/CNA:

Japan's central bank on Tuesday left its super-low interest rates unchanged as it cut its growth forecasts for Asia's largest economy for the second time in less than three months.

The policy board decided unanimously to leave interest rates at 0.5 per cent, where they have been since February last year, the Bank of Japan said in a statement at the end of a two-day meeting.

The central bank trimmed its forecast for economic growth in the current fiscal year to March to 1.2 per cent from 1.5 per cent previously.

It also lowered its forecast for gross domestic product (GDP) growth in the next fiscal year to 1.5 per cent from 1.7 per cent.

The Bank of Canada also left interest rates unchanged yesterday.

The economic data reported yesterday were mostly weak.

In Germany, the ZEW index of investor confidence fell to minus 63.9, the lowest since it was first compiled in December 1991, from minus 52.4 in June, while in France, confidence among manufacturers fell to the lowest in five years in June.

Meanwhile, inflation continues to roar ahead, jumping in the UK to 3.8 percent in June from 3.3 percent in May.

And the US faces both slowing economy and high inflation. Bloomberg reports:

Retail sales rose 0.1 percent from the previous month, the Commerce Department said today in Washington. That was less than economists forecast. At the same time, the Labor Department reported that producer prices jumped 1.8 percent, the most since November. From a year ago, prices climbed 9.2 percent, a surge unseen since 1981.

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