The Bank of Japan kept its ultra-loose monetary policy in place Thursday as inflation remains stubbornly low in the world’s third-biggest economy, bucking a trend of gradually tighter policy in major economies.
The bank said it would purchase 10-year government bonds so that long-term interest rates would remain “at around zero percent”.
The BoJ will also keep charging a negative interest rate on some accounts held by financial institutions at the central bank in a bid to prompt lending by commercial banks.
Bank of Japan (BOJ) Governor Haruhiko Kuroda during a press conference at the BOJ headquarters in Tokyo on December 21, 2017. / AFP PHOTO / JIJI PRESS / – / Japan OUT
BoJ chief Haruhiko Kuroda later Thursday gave few clues about any timeline for pulling back the bank’s huge asset-buying programme.
“We won’t raise interest rates just because our economy is doing well … We’ll consider further easing if there’s a risk that the momentum (towards achieving the two-percent inflation target) isn’t maintained,” he told reporters.
Investors were also watching out for possible indications on whether Kuroda will stay on as he nears the end of his five-year term.
Prime Minister Shinzo Abe has reportedly asked him to stay on.
However, Kuroda was coy on this subject, saying he was not in a position to comment on personnel issues.