BOJ Keeps Policy Unchanged, Upgrades Economic View

Tokyo, Feb. 14 (Jiji Press)--The Bank of Japan kept its monetary policy unchanged on Thursday while upgrading its economic assessment for the second straight month. The monetary policy decision was made by a unanimous vote at the BOJ Policy Board's two-day meeting through the day. The central bank kept its unsecured overnight call rate target at zero-0.1 pct. The size and pace of asset purchases by the BOJ under its fund aimed at shoring up Japan's economy and helping the nation beat deflation were also left unchanged. The BOJ decided on additional monetary easing steps at its two previous policy-setting meetings in December and January. At the January meeting, the bank also introduced an inflation target of 2 pct. In a statement to announce its latest decision, the BOJ said that Japan's economy "appears to stop weakening," brighter than its assessment in January that the economy "remains relatively weak." The better assessment mainly reflects milder drops in exports and a pause in the downtrend of industrial production. Given that the economic conditions are stable at present, the BOJ apparently judged it appropriate to wait and see the effects of its recent easing steps for the time being. In the statement, the BOJ said that Japan's exports continue to decrease, but at a milder pace, thanks to some signs of pickup in overseas economies. Industrial production appears to stop decreasing partly because the negative effects from the end of some measures in Japan to shore up automobile demand have been dissipating, the bank said. Looking ahead, the Japanese economy is expected to level off more or less for the time being, and then "return to a moderate recovery path" as domestic demand remains firm and overseas economies gradually emerge from the deceleration phase, it said. In the statement, the BOJ also reiterated its intention to "pursue aggressive monetary easing" to achieve the 2 pct inflation target "at the earliest possible time." At the January policy meeting, the BOJ decided to buy about 13 trillion yen of Japanese government securities, including 2 trillion yen of long-term bonds, every month from January 2014 under the special fund without setting a termination date, after increasing the balance of the fund to 101 trillion yen by the end of this year. At the February meeting, the Policy Board rejected by an eight-to-one vote a proposal from Ryuzo Miyao, one of the nine members, that the central bank keep the current zero interest rate policy until 2 pct inflation comes into sight. Economic and Fiscal Policy Minister Akira Amari did not participate in the February meeting after attending the January meeting. END