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14/06/24
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BOJ Keeps Rates Flat
On Friday, the Bank of Japan kept interest rates unchanged as generally expected and said it would at its next meeting decide on how to reduce its bond buying.
The BOJ kept its benchmark short-term rate at 0.1 after March’s historic hike.
The central bank also said it would not make any short-term changes to its bond-buying activities, disappointing market optimism for a change immediately. The BOJ said it would meet with market participants and reveal a plan to reduce its bond-buying at the next meeting at the end of July.
The BOJ said it would have meetings with buy-side groups, securities firms groups, and commercial banks groups to help decide on how to reduce its bond purchasing activities.
Japanese stocks were higher on the possibility of policy staying looser for longer, and the Nikkei 225 index rose 0.5%.
The Japanese yen dropped sharply, and the USDJPY pair rose 0.6%.
In March, the central bank increased rates for the first time in 17 years and stopped its yield curve control policy. Although the BOJ had also indicated it planned to eventually reduce bond purchases, it gave no specific timeline.
The BOJ’s decision to not change bond purchases in the short-term comes amid the Japanese economy recently experiencing weakness.
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