Vertiv Introduces New Single-Phase Uninterruptible Power Supply for Distributed Information Technology (IT) Networks and Edge Computing Applications in Europe, Middle East, and Africa (EMEA)Read more Students from JA Zimbabwe Win 2023 De La Vega Global Entrepreneurship AwardRead more Top International Prospects to Travel to Salt Lake City for Seventh Annual Basketball Without Borders Global CampRead more Rise of the Robots as Saudi Arabia Underscores Global Data and Artificial Intelligence (AI) Aspirations with DeepFest Debut at LEAP23Read more Somalia: ‘I sold the last three goats, they were likely to die’Read more Merck Foundation and African First Ladies marking World Cancer Day 2023 through 110 scholarships of Oncology Fellowships in 25 countriesRead more Supporting women leaders and aspirants to unleash their potentialRead more Fake medicines kill almost 500,000 sub-Saharan Africans a year: United Nations Office on Drugs and Crime (UNODC) reportRead more Climate crisis and migration: Greta Thunberg supports International Organization for Migration (IOM) over ‘life and death’ issueRead more United Nations (UN) Convenes Lake Chad Countries, Amid Growing Regional CrisisRead more

Bank of Japan leaves policy unchanged, yen weakens

show caption
The Bank of Japan shocked the market last month by adjusting one of its policy tools./AFP
Print Friendly and PDF

Jan 18, 2023 - 06:48 AM

TOKYO, JAPAN — Japan’s central bank left its ultra-easy monetary policy unchanged on Wednesday, a move that sent the yen plunging, despite heavy speculation it could again tweak a key lever.

The announcement after a two-day meeting saw the yen lose about 1.5 percent against the dollar, with the greenback buying 130.51 yen in the minutes after the decision, from around 128.45 earlier in the day.

The Bank of Japan shocked the market last month by adjusting one of its policy tools, widening the band in which it allows rates for 10-year Japan government bonds to move.

It said the move would “improve market functioning”, and the surprise decision saw the Japanese currency gain ground against the dollar after months of weakening over the growing gap between Japanese and US central bank policy.

But the new range set last month has been breached regularly in recent days, intensifying speculation that the bank would have to act again.

For months, the bank has bucked the trend set by global peers and stood its ground on its loose monetary policy, convinced that inflation has not yet taken hold in Japan in a sustained fashion.

Prices have risen consistently since the beginning of the year, and while they have not neared levels seen in other developed economies, they are at figures not seen in Japan since the 1980s.

BoJ Governor Haruhiko Kuroda, whose term ends this spring, has insisted though that the rises are largely temporary and linked to exceptional factors such as the war in Ukraine.

He has warned that the country is still far from achieving the bank’s longstanding goal of sustained two-percent inflation, seen as key to stimulating a stagnant economy.

Ahead of the decision, analysts said even if the bank stood its ground now, it would remain under pressure to move soon.

“Speculation will remain that it will eventually review its policy,” said Takehide Kiuchi, executive economist at Nomura Research Institute and a former BoJ policy board member.

“Market focus will now shift to the appointment of a new governor,” he told AFP, noting that the bank needs to “make its policy flexible” whoever is appointed.

MAORANDCITIES.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.