Created Using Marketscope 2.0 (1 Minute Chart)
THE TAKEAWAY:The Bank of Japan held interest rates at 0.1 per cent and addressed monetary policy as the price target is sought as soon as possible.
The Bank of Japan decided in its Policy Meeting today to keep interest rates at 0.10 per cent.
In its statement, the Bank of Japan addressed the international picture, the domestic economy and risks to growth, and a view on monetary policy and price levels. The statement explained that whilst overseas economies are still in a phase of deceleration, there are some signs of these economies improving as investor risk aversion reduces. Domestically, the Bank of Japan expects the economy to level off for the time being however cited that there is still a high level of uncertainty which included the European debt problem and the momentum of the US recovery.
Regarding monetary policy, the Bank of Japan policy makers retained the price stability target at 2 per cent and stated that they will pursue monetary easing, aiming to achieve this target at the earliest possible time. The Bank noted that it will take considerable time for the effects of monetary policy to be seen throughout the economy, and that it would monitor any risks to the sustainability of economic growth.
On the announcement, the Yen experienced some volatility, and remained largely unchanged as markets deciphered the Bank’s statement. Then Yen then resumed its recent declines as investors saw potential room for an acceleration of asset purchases and more aggressive easing.