Japanese Bank Keeps Rates Steady


by NTDTelevision

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The Japanese economy is in a positive cycle and the BOJ holds interest rates steady waiting to see the impact of the strong yen. There's not much wriggle room for the bank as interest rates are already at 0.1 percent.

The Bank of Japan held interest rates steady Tuesday, keeping its very limited firepower on hold until the impact of the strong yen becomes clearer.

The BOJ said the economy was showing further signs of moderate recovery, as exports and production increased, while it would watch any downside risks.

The central bank had eased policy only last week and had very little latitude to move with rates already at 0.1 percent.

The yen remained near 15-year highs against the dollar, but the pace of the advance has been gradual, so far precluding market intervention.

Still, the BOJ may revise its long-term economic outlook downward at the end of next month, which could herald another easing.

Government pressure has been on the BOJ to try to prop up the economy, while last week's boosting of cheap loans to banks was seen as mainly symbolic.

Japan-watchers don't expect the central bank to move unless the yen rapidly appreciates or share markets dive.

The few options left for the BOJ include a return to zero interest rates and an increase in bank's government bond purchases.

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