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BoJ keeps QE policy

March 17, 2015

Japan's central bank has decided against widening its current monetary stimulus program. But experts warned deflationary pressures might force the Bank of Japan to expand its quantitative easing scheme soon.

https://p.dw.com/p/1Eru3
Bank of Japan in Tokyo Copyright: imago/Xinhua
Image: imago/Xinhua/K. Seki

Wrapping up a two-day policy meeting Tuesday, the Bank of Japan held off widening its stimulus program under which fresh money worth 80 trillion yen ($660 billion, 623 billion euros) is pumped into markets annually.

"There's absolutely no change to our stance of aiming to achieve our 2-percent inflation target at the earliest date possible with a timeframe of roughly two years," BoJ Governor Haruhiko Kuroda said in a statement.

He acknowledged, though, that the drop in oil prices could briefly pull Japan's consumer prices back into negative territory, but insisted the economic economy was on track to ending almost two decades of deflation and fitful growth.

Shipments abroad picking up

Analysts agreed that Japan's economy was emerging from last year's recession thanks to a much-awaited rebound in exports and factory output.

But private consumption has been found stuck at unsatisfactory levels as households continue to curb spending after being hit by last year's value-added tax hike.

Wages rise in Japan

On Wednesday, Japan's largest companies are due to announce their wage plans following annual talks with labor unions. The results will be crucial to Prime Minister Shinzo Abe's push to lead the country out of deflation in a sustainable manner.

hg/ng (AFP, Reuters)