Members of the Bank of Japan’s monetary policy board said that the country’s economic recovery is expected to continue, minutes from the bank’s September 14 and 15 meeting revealed on Tuesday.
At the meeting, decided to maintain its target of raising the monetary base at an annual pace of about JPY 80 trillion. It also kept its benchmark lending rate unchanged at 0 to 0.10 percent.
“Japan’s economy has continued to recover moderately, although exports and production are affected by the slowdown in emerging economies. Overseas economies — mainly advanced economies — have continued to grow at a moderate pace, despite the slowdown in emerging economies,” the minutes said.
Exports and industrial production have been more or less flat. This was a downgrade from its earlier view that exports and industrial production have been picking up.
Inflation expectations appear to be rising, the minutes said, due to the effects of the decline in energy prices.
“The year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) is about 0 percent. Inflation expectations appear to be rising on the whole from a somewhat longer-term perspective. The year-on-year rate of increase in the CPI is likely to be about 0 percent for the time being, due to the effects of the decline in energy prices,” the minutes said.
Downside risks include the health of commodity exporters and emerging markets, economic momentum in Europe and the pace of the economic recovery in the United States.
The central bank will continue to take steps as needed to achieve its goals, the minutes said.
“Quantitative and qualitative monetary easing (QQE) has been exerting its intended effects, and the Bank will continue with QQE, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine both upside and downside risks to economic activity and prices, and make adjustments as appropriate,” the minutes said.
Also on Tuesday, the BoJ said that overall bank lending in Japan was up 2.6 percent on year in September, coming in at 491.312 trillion yen.
That was shy of forecasts for 2.7 percent, which would have been unchanged from the previous month.
Excluding trusts, bank lending also was up 2.6 percent to 427.163 trillion yen. That was beneath forecasts for 2.8 percent, which would have been unchanged from the August reading.
Lending from trusts gained 2.2 percent to 64.149 trillion yen, while lending from foreign banks added 0.2 percent to 1.926 trillion yen.
The material has been provided by InstaForex Company – www.instaforex.com