The Strategist

Japan's central bank confirms the need to keep interest rates low



07/26/2022 - 11:36



In order to assist Japan's fragile economy, Bank of Japan governors concurred at a meeting in June that the regulator should maintain exceptionally low interest rates, according to Reuters.



pixnio.com
pixnio.com
Low rates should also guarantee that rising wages will be matched by escalating inflation. This was noted in the minutes of the June meeting of the Bank of Japan, which were released on Tuesday.

Some of the nine members of the central bank's board made this observation, pointing out that price increases are becoming more ubiquitous and are changing consumers' expectations for inflation in Japan, who had previously anticipated modest acceleration in both inflation and wage growth.

In contrast to the global trend toward tightening monetary policy, the Bank of Japan maintained rates in June and reiterated its determination to defend the yield limit of Japanese government bonds by making limitless purchases of debt securities. The central bank thus demonstrated its intention to concentrate on assisting Japan's flimsy economic recovery.

source: reuters.com

 




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