The Bank of Japan leaves policy unchanged

YOKOHAMA, JAPAN – JUNE 11: Shinji Okazaki #9 of Japan celebrates scoring a goal with team mate Takashi Usami #11 during the international friendly match between Japan and Iraq at Nissan Stadium on June 11, 2015 in Yokohama, Japan. (Photo by Chris McGrath/Getty Images)

The Bank of Japan has left monetary policy unchanged at the conclusion of its March policy meeting, a decision that was unilaterally expected by financial markets.

Voting 7-2 in favour of the measure, the bank left interest rates unchanged and -0.1% and pledged to purchase Japanese government bonds so that 10-year yields will remain at around 0%.

It said that it will conduct purchases of government bonds at an annual pace of around 80 trillion yen to achieve this.

The BoJ said that is will persist with this program — known as quantitative and qualitative easing (QQE) with yield curve control — as long as it is necessary to achieve its inflation target of 2% in a stable manner.

It also left its purchases of exchange-traded funds (ETFs) and Japanese real estate investment trusts (J-REITS) at an annual pace of about 6 trillion and 90 billion yen respectively.

The bank also kept its assessment of the Japanese economy unchanged from its prior meeting.

“Japan’s economy has continued its moderate recovery trend,” the BoJ said.

“With regard to the outlook, Japan’s economy is likely to turn to a moderate expansion.”

There has been little market reaction to the decision, reflecting the view that policy setting were never likely to change at this meeting.

The March monetary policy statement can be accessed here.

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