At its 12 July monetary policy meeting, the Bank of Japan (BoJ) decided to maintain the size of the Asset Purchase Program at JPY 70 trillion, in a decision expected by the market. However, the Central Bank changed the composition of the program by boosting asset purchases, specifically by increasing the acquisition of treasury discount bills by JPY 5 trillion, while simultaneously reducing the maximum outstanding amount of fixed-rate loans by the same quantity. In a separate decision, the Bank decided to leave the collateralized overnight call rate unchanged at around 0 to 0.1%, which was widely expected by the market. The BoJ maintained its assessment that economy activity has started picking up moderately as domestic demand remains firm mainly supported by reconstruction-related demand. On the external front, the Bank stated that overseas economies have shown some improvements, albeit they remain in a deceleration phase. In addition, the Bank signalled that global financial markets continue to be dragged down by the European debt crisis. The next monetary policy meeting is scheduled for 8 August.
Japan Monetary Policy
Central Bank maintains Asset Purchase Program, changes composition
July 12, 2012
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Japan Monetary Policy Chart
Note: Collateralized overnight call rate in %.
Source: Bank of Japan (BoJ).
Japan Economic News
October 12, 2016
Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined for the first time in three months in August.
October 4, 2016
Consumer sentiment rose from August’s 42.0 to 43.0 in September.
October 3, 2016
According to the Bank of Japan’s quarterly TANKAN business survey, sentiment among large manufacturers was stable at 6 in Q3.
September 30, 2016
In August, the core consumer price index was flat compared to the previous month, which was above the 0.2% decline in July.
September 30, 2016
In August, industrial production expanded 1.5% over the previous month in seasonally-adjusted terms, which contrasted July’s 0.4% decrease (previously reported: 0.0% month-on-month).