Bloomberg reports the Bank of Japan’s monetary policy decision on Friday.
The Bank of Japan kept interest rates near zero and raised its economic assessment even as government pressure for it to fight deflation intensified.
Governor Masaaki Shirakawa and his colleagues held the overnight lending rate at 0.1 percent, the central bank said in a statement today in Tokyo. The release came hours after Deputy Prime Minister Naoto Kan warned about the danger that falling prices pose to Japan’s recovery from its worst postwar slump…
“Japan’s economy is picking up mainly due to various policy measures taken at home and abroad, although the momentum of a self-sustaining recovery in domestic private demand remains weak,” the central bank said…
The government said today that the economy “is in a mild deflationary phase,” referring to declining prices in its evaluation for the first time since June 2006...
Kan said the government will tell the central bank that monetary policy “plays a significant role” in tackling falling prices. His concern was echoed by other ministers.
It looks like Japan’s interest rates will stay low for an extended period of time, but that’s not exactly a new phenomenon.
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