The Bank of Japan leaves its monetary policy unchanged | Photo credits: TK Kurikawa / Shutterstock.com
TOKYO, June 17 (Reuters) – The Bank of Japan (BoJ) left interest rates unchanged on Friday and promised to hold them at their current level or lower, underscoring its willingness to continue to support a fragile economy through the maintenance of a very accommodating monetary policy.
She also said she would “carefully” monitor the economic impact of yen fluctuations in the foreign exchange market.
Markets’ anticipation of a monetary status quo from the BoJ has sent the yen down to its lowest level in 24 years against the dollar in recent days, a drop that could weigh on consumption by pushing up commodity prices. imported products.
“We need to carefully monitor the impact that movements in financial and currency markets may have on the economy and prices in Japan,” the BoJ said in a statement.
Despite the depreciation of the national currency, it maintained the short-term interest rate target at -0.1% and its commitment to contain the yield on ten-year government bonds around zero.
These decisions, which come as no surprise to investors, widen the gap between the BoJ’s strategy and those pursued by the other major central banks in the world, which are now on the path to raising interest rates to fight inflation. .
The yen lost as much as 1.7% against the dollar in reaction to these announcements while the yield on Japanese 10-year government bonds fell.
The BoJ also announced a new purchase offer without a cap on the amount of ten-year government bonds, a measure aimed at ensuring that the ten-year yield does not exceed the ceiling of 0.25% that it has settled down.
This ceiling rose at the start of the day to 0.268% before returning to 0.231% after the central bank’s announcements.
(Report Leika Kihara and Daniel Leussink, French version Marc Angrand)