Will target 10-year interest rate committing to keep it around zero
IFM Correspondent
September 21, 2016: Japan’s central bank issued a plethora of changes to its policy approach but kept rate steady. The Bank of Japan (BOJ) said it would start targeting 10-year interest rates, committing to keep them around zero as part of a new policy framework aimed at stoking inflation. The bank’s move signifies its attempt to bring the economy back on track and boost prices as the existing policies failed to achieve 2% inflation in a promised two-year time frame. The bank has kept deposit rate unchanged at negative 0.1 per cent.
The BOJ eliminated the maturity range for its Japan government bond purchases and abandoned its target to increase the monetary base by 80 trillion yen a year, although the central bank said it currently plans to keep buying bonds so that the balance of its holdings increases by that amount.
Japanese stocks and the yen were down in a volatile session for Asian markets on Wednesday as investors nervously awaited the outcome of the Bank of Japan’s policy meeting.