Investing.com – The Bank of Japan on Wednesday kept its benchmark interest rate unchanged, in a widely expected move and cut its economic outlook citing the effects of a stronger yen.
In a statement, the BoJ said it was keeping its benchmark interest rate unchanged between a range of 0.0% to 0.1%, broadly in line with expectations.
A statement on monetary policy released after the announcement showed that the Bank of Japan’s nine-man policy board voted unanimously to maintain the interest rate at its current level.
The BoJ also kept unchanged a JPY20 trillion yen fund to buy assets such as corporate bonds and exchange-traded funds, after increasing it by JPY5 trillion at the bank’s previous policy meeting.
“Japan’s economic activity has continued picking up, but at a more moderate pace,” the Bank of Japan said in a statement accompanying the policy decision.
The statement added that, “Japan’s economy will face an adverse effect from the slowdown in overseas economies and the appreciation of the yen, as well as from the flooding in Thailand. After that, the economy is expected to return to a moderate recovery path.”
Following the decision, the yen was fractionally higher against the U.S. dollar, with USD/JPY easing down 0.08% to trade at 76.97.
Meanwhile, Asian stock markets were broadly lower. Hong Kong's Hang Seng Index tumbled 2.3%, Australia’s ASX/200 Index fell 0.85%, while Japan’s Nikkei 225 Index slumped 0.9%.
In a statement, the BoJ said it was keeping its benchmark interest rate unchanged between a range of 0.0% to 0.1%, broadly in line with expectations.
A statement on monetary policy released after the announcement showed that the Bank of Japan’s nine-man policy board voted unanimously to maintain the interest rate at its current level.
The BoJ also kept unchanged a JPY20 trillion yen fund to buy assets such as corporate bonds and exchange-traded funds, after increasing it by JPY5 trillion at the bank’s previous policy meeting.
“Japan’s economic activity has continued picking up, but at a more moderate pace,” the Bank of Japan said in a statement accompanying the policy decision.
The statement added that, “Japan’s economy will face an adverse effect from the slowdown in overseas economies and the appreciation of the yen, as well as from the flooding in Thailand. After that, the economy is expected to return to a moderate recovery path.”
Following the decision, the yen was fractionally higher against the U.S. dollar, with USD/JPY easing down 0.08% to trade at 76.97.
Meanwhile, Asian stock markets were broadly lower. Hong Kong's Hang Seng Index tumbled 2.3%, Australia’s ASX/200 Index fell 0.85%, while Japan’s Nikkei 225 Index slumped 0.9%.