Japan central bank stands pat after Fed rate cut

Bank of Japan Gov. Haruhiko Kuroda attends a meeting at its headquarters in Tokyo Thursday, Sept. 19, 2019. Japan’s central bank has opted to keep its monetary policy unchanged despite growing signs of trouble that prompted the Federal Reserve to cut its benchmark rate. (Muneyuki Tomori/Kyodo News via AP)

TOKYO — Japan's central bank opted Thursday to keep its monetary policy unchanged despite the growing signs of trouble that prompted the Federal Reserve to cut its benchmark rate.

The Bank of Japan said in its policy statement that exports, industrial output and business sentiment had been affected by the slowdown in overseas markets.

The China-U.S. tariff war has pummeled Japan's exports. But the BOJ said strong corporate profits were supporting business investment.

The Federal Reserve reduced its key short-term rate — which influences many consumer and business loans — by a quarter-point to a range of 1.75%-2% on Wednesday.

Fed Chairman Jerome Powell said the U.S. expansion appears durable but if the economy weakens another rate cut was possible.

The BOJ's key interest rate has been at minus 0.1% for years, while it has continued massive asset purchases to help inject money into the economy. So far, it has failed to attain the 2% inflation rate target it says is needed to help sustain growth.

The bank's statement said that "downside risks concerning overseas economies seem to be increasing" and it will monitor the situation to see if momentum toward higher inflation is failing.

But given strains on banks and the potential impact on the Japanese yen it might not follow through on promises to act if necessary, Marcel Thieliant of Capital Economics said in a commentary.

He said that "concerns over the impact of looser policy on the health of banks have intensified. As such, we reiterate our view that the bank will keep its interest rate targets unchanged over the coming year."

People also read these

China launches second space station, Tiangong 2

Sep 15, 2016

China has launched its second space station in a sign of the growing sophistication of its...

China starts 2017 engulfed by smog, issues...

Jan 2, 2017

Beijing and other cities across northern and central China are shrouded in thick smog, prompting...

Asia shares falter as investors watch dollar,...

Jan 6, 2017

Asian shares are wavering as a weaker dollar discourages investors who are shying away from risky...

Choked by smog, Beijing creates new environmental...

Jan 8, 2017

Officials in Beijing have announced a new environmental police squad to root out illegal burning in...

McDonald's sells China business in deal worth up...

Jan 9, 2017

Fast-food giant McDonald's is selling a controlling stake in its China business to a group of...

About Us

Frontal Report is an emerging leader in all forms of media. We aim to be the leading news brand for readers around the world.

Contact us: sales[at]frontalreport.com

Subscribe Now!