Bank of Ja­pan de­bated QE ex­pan­sion at Jan meet­ing

The Pak Banker - - FRONT PAGE -

The Bank of Ja­pan's staff made two pro­pos­als, one to ex­pand the bank's mas­sive as­set-buy­ing pro­gramme and an­other to add neg­a­tive in­ter­est rates to as­set pur­chases, at the Jan­uary rate re­view, min­utes of the meet­ing showed on Fri­day.

The BOJ even­tu­ally de­cided to adopt the neg­a­tive in­ter­est rate pol­icy af­ter sev­eral mem­bers ar­gued the move would help fore­stall the risk of ex­ter­nal fac­tors de­lay­ing the eradication of Ja­pan's "de­fla­tion­ary mind­set," the min­utes showed.

The BOJ un­ex­pect­edly de­ployed the neg­a­tive in­ter­est rate pol­icy in Jan­uary to stim­u­late the econ­omy, al­though four of the nine board mem­bers dis­sented the de­ci­sion, which drew crit­i­cism from law­mak­ers for fail­ing to boost stock prices or ar­rest an un­wel­come rise in the yen.

The cen­tral bank kept pol­icy set­tings un­changed at a sub­se­quent meet­ing in March but of­fered a bleaker view on the econ­omy, sig­nalling its readi­ness to roll out fur­ther stim­u­lus if needed to hit its am­bi­tious 2 per­cent in­fla­tion tar­get.

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