BoJ’s says NO to more monetary stimulus

The bank of Japan (BoJ) is refraining from increasing monetary stimulus.

Moreover, it is showing a more optimistic view on the economy as BOJ’s Governor Haruhiko Kuroda is focusing on stronger growth which is impeding inflation.

In fact, in a statement on Friday, it was mentioned that the central bank would continue to boost the monetary base at an annual pace of 80 trillion yen ($662 billion).

Japan is showing mixed signals concerning its recovery from last year’s recession, followed by an increase in spending by companies as well as households.

Kuroda stated that further easing was not necessary now as the economy looked stable, though cheaper oil could affect inflation.

Kuroda further stated that inflation expectations were increasing rising and the gap between demand and supply would continue to tighten.

would lead to increases in consumer prices.

The Bank of Japan could face challenges by the tumble in oil prices in its effort to boost inflation.

Moreover, the BOJ’s preferred price gauge rose 0.2 percent in March from a year earlier and UK’s inflation rate fell below zero for the first time since 1960 in April.

According to Yuji Shimanaka, an economist at Mitsubishi UFJ Morgan Stanley Securities Co, the BOJ should add stimulus and it had made it clear that it would meet its target.

Source: Bloomberg
Priscilla Camryn By: Priscilla Camryn
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