BOJ keeps monetary stimulus on hold

Bank of Japan (BOJ) refrains from launching further policy easing after official data records a higher than expected growth in first quarter

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

The central bank of Japan announced on Friday that it will not boost its monetary base as the country’s economy is showing signs of growing confidence. The BOJ also said that it will increase its base money to 80 trillion yen (422 billion pounds) through aggressive asset purchasing.

The decision, which came at no surprise, followed Wednesday’s flourishing data as Japan’s gross domestic product (GDP) expanded by 0.6 in the first quarter of 2015 [the fastest pace in a year], reaching an annualised growth rate of 2.4 percent - a much higher result than the market expectation of 1.5 percent.

Japan, signalling victory in its battle with its economic recession, is yet to convince experts as Wednesday’s data was driven by inventories and exports. Private consumption and capital expenditure is also yet to pick up momentum. 

In April 2013, the bank launched a monumental monetary stimulus aimed at boosting the country’s monetary base. Additionally, the bank injected a further stimulus of $700 billion in October 2014 as part of its quantitative easing program.

TRTWorld and agencies