Japan Monetary Policy


Central Bank refrains from adding extra stimulus

At its 8-9 August monetary policy meeting, the Bank of Japan (BoJ) decided to maintain the size and the composition of the JPY 70 trillion Asset Purchase Program, in a decision expected by the market. The decision is in line with the stance of other major central banks that also decided to hold off from adding additional stimulus at their latest monetary policy meetings. The Bank also 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 "economic activity has started picking up moderately as domestic demand remains firm mainly supported by reconstruction-related demand". On the external front, the Bank reckoned that overseas economies have shown some improvements, albeit "they still have not emerged from a deceleration phase." In addition, the Bank signalled that global financial markets remain nervous due to the European debt crisis. The next monetary policy meeting is scheduled for 18 September.

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Japan Monetary Policy Chart

Japan Monetary Policy August 2012

Note: Collateralized overnight call rate in %.
Source: Bank of Japan (BoJ).

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