Japan retains interest rate of 0.5%

by Richard Kilner

Story link: Japan retains interest rate of 0.5%

Today the Bank of Japan held its monthly Monetary Policy Meeting and chose to leave the benchmark interest rate unchanged at 0.5%.

The central bank has stated that Japan’s economic growth has remained stalled, due to the rising price of food and energy coupled with slow export growth.

The bank forecasts sluggish growth in the immediate future, which will improve to a moderate level of growth once worldwide energy prices stabilise and other economies improve.

Japanese inflation (according to the CPI measure, minus fresh food) is the highest for over a decade, at 2%.

The Bank of Japan predicts that CPI will continue to rise in the immediate future but will level out in the medium term.

Global financial turbulence is still a factor for Japan, as is the worldwide inflationary powers of soaring food and energy costs.

The central bank has pledged to remain flexible in its monetary policy view, and to carefully assess the future impact of its interest rate decisions.