Japan: Bank of Japan upbeat on economic recovery
July 10, 2013
At its 10-11 July monetary policy meeting, the Bank of Japan (BoJ) decided to leave the monetary policy unchanged. The Bank also unanimously decided to conduct money market operations so that the monetary base - its main policy instrument - will increase at an annual pace of between JPY 60 and 70 trillion (approximately USD 604 and 704 billion). This decision was in line with market expectations. In its accompanying statement, the Central Bank upgraded its view on the economy and now affirms that the economy "is starting to recover moderately." The BoJ stated that overseas economies are gradually picking up, thereby supporting demand for Japanese goods, while domestic demand is also improving. Regarding price developments, the Bank affirmed that, although inflation is now close to zero, some indicators point to a rise in inflation expectations. All FocusEconomics Consensus Forecasts panellists expect the collateralized overnight call rate to remain unchanged at between 0% and 0.1% both this year and next.