Bank of Japan Expected to Leave Monetary Policy Untouched

The Bank of Japan is likely to leave its ultra-loose monetary policy unchanged at its two-day policy meeting starting Wednesday, while focusing on capital investment and wages in assessing the level of the economic recovery in Japan, sources familiar with the matter said Monday.

The nine-member Policy Board is also expected to discuss how the Japanese economy will be affected by overseas economic factors, including a tapering of the U.S. Federal Reserve’s quantitative easing, and slowing growth in emerging economies as well as rising crude oil prices amid escalating tensions over Syria.

As the central bank is likely to maintain its large-scale monetary easing policy introduced in April to beat deflation, the focus is on whether the BOJ will upgrade its assessment of the economy.

The BOJ said last month the economy is “starting to recover moderately.”

Some within the BOJ say it should lift the assessment by using an expression such as “the economy is recovering moderately,” after government data showed capital spending by Japanese companies increased for the first time in three quarters in the April-June period and consumer prices rose further in July, the sources said.

But some remain cautious, saying any upgrading should take place after assessing real economic growth and the pace of improvement in corporate sentiment to be shown by revised gross domestic product data for the April-June period on Sept. 9 and the BOJ’s Tankan business confidence survey on Oct. 1, the sources said.

via Mainichi

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