Japan Monetary Policy

Japan

Japan: Japan struggles against rising yen and earthquake effects

August 4, 2011

The yen continues to rise despite the authorities' efforts to curb rapid appreciation. On 4 August, the Japanese authorities intervened in the foreign exchange market to tame the appreciation of the yen. The August move represented the third intervention since September 2010 and pushed the yen to a three-week low of 80.20 JPY per USD from around 77.10 JPY per USD. However, the impact of the unilateral market intervention has no effects and by the end of August the yen traded at 76.58 per USD, which represented a 1.3% gain compared with the previous month. On a year-on-year basis, the yen appreciated a nominal 6.9% against the USD, lifting the yen to the strongest level in more than 50 years. As the market interventions prove ineffective to stem the steady appreciation of the yen, the government is adopting additional measures. On 26 August, the Finance Ministry announced a USD 100 billion facility to help companies to cope with the erosion of competitiveness in international markets. The government will transfer some of its USD 1.1 billion foreign exchange reserves to the state-owned Japan Bank for International Cooperation, in order to aid exporters and promote purchases overseas. Meanwhile, at its monetary policy meeting on 4 August, the policy board of the Bank of Japan (BoJ) decided unanimously to increase the amount of the Asset Purchase Program by about JPY 10 trillion (USD 128 billion) to JPY 50 trillion (USD 640 billion).The BoJ deemed it necessary to enhance the program to ensure a successful transition from the recovery phase following the earthquake disaster to a sustainable growth path with price stability. Moreover, the Bank decided to leave the collateralized overnight call rate unchanged at around 0 to 0.1%.


Author:,

Sample Report

Looking for forecasts related to Monetary Policy in Japan? Download a sample report now.

Download




Japan Economic News

  • Japan: Machinery orders decline in May

    July 11, 2018

    Although core machinery orders—a leading indicator of capital spending over a three- to six-month period—contracted in May, the fall was weaker-than-expected, suggesting that capital expenditure will gain steam further down the road.

    Read more

  • Japan: Business confidence weakens in Q2

    July 2, 2018

    According to the Bank of Japan’s quarterly Tankan business survey, sentiment among large manufacturers fell in the second quarter of 2018, suggesting economic momentum has yet to gain traction following a weak first quarter.

    Read more

  • Japan: Consumer confidence declines marginally in June

    June 29, 2018

    Consumer sentiment inched down to 43.7 in June from 43.8 in May, coming in just below market expectations of a stable print.

    Read more

  • Japan: Industrial production falls in May

    June 29, 2018

    Industrial production contracted 0.2% on a month-on-month and seasonally-adjusted basis in May, contrasting April’s revised 0.5% increase (previously reported: +0.3% month-on-month).

    Read more

  • Japan: Core inflation stable in May

    June 22, 2018

    The core consumer price index rose 0.1% in month-on-month seasonally-adjusted terms in May, reversing April’s 0.1% fall. Core inflation was steady at 0.7% in May, unchanged from April and in line with market expectations.

    Read more

More news

Search form