Bank of Japan holds fire on stimulus

GMT 08:15 2015 Friday ,22 May

Arab Today, arab today Bank of Japan holds fire on stimulus

Stripping out impact of sales tax rise
Tokyo - AFP

The Bank of Japan on Friday held fire on launching more stimulus, days after official data showed the world's number three economy grew more than expected in the first quarter.

Policymakers kept the central bank's annual 80 trillion yen ($662 billion) monetary easing programme in place after a two-day meeting and investors will now be watching a briefing by governor Haruhiko Kuroda later in the day.

On Wednesday the government released figures showing Japan's economy, which sank into a brief recession last year, expanded by a better-than-expected 0.6 percent from the previous quarter.

In annualised terms, growth was 2.4 percent between January-March -- well ahead of disappointing 0.2 percent growth in the US economy -- as capital spending and the housing market showed signs of strength, although exports dipped slightly and consumer spending was weak.

"Japan's economy has continued to recover moderately," the bank said Friday, slightly tweaking its language from a meeting last month when it said it "continued its moderate recovery trend".

The BoJ also pointed to "declining" public investment.

Kuroda has been forced to push back a timeline for hitting a 2.0 percent inflation target -- a cornerstone of Prime Minister Shinzo Abe's plan to kickstart the deflation-plagued economy -- although he insists that price rises are around the corner.

Stripping out the impact of a sales tax rise last year, Japan's inflation rate in March came in at a tepid 0.2 percent from a year ago, well short of the BoJ's target.

That has spurred speculation of further easing measures.

"It came as no surprise that the Bank of Japan left policy settings unchanged today, and the apparent strength in Q1 GDP suggests that additional easing in July is off the table," Marcel Thieliant from Capital Economics said in a commentary.

"Nonetheless, we remain convinced that the prospect of prolonged below-target inflation will eventually convince policymakers to step up the pace of asset purchases."

In currency trading, the dollar-yen rate slipped to 120.83 from 120.91 yen just before the BoJ's announcement, and well off the 121.07 yen in New York.

Arab Today, arab today
Arab Today, arab today
arabtoday arabtoday arabtoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabs, Arab, Arab