Bank of Japan Confirms its Monetary Policy

Bank of Japan (BOJ) Governor Haruhiko Kuroda has reiterated the BOJ’s stance on monetary easing. This confirms the use of a different policy from other central banks that have begun tightening monetary policy.

“We will monitor the impact of COVID-19 for a while and will proceed further financial easing without hesitation if necessary,”

Kuroda said.

The BOJ’s move toward accommodative monetary policy reflects the lack of monetary policy action by the BOJ following the Federal Reserve and other European central banks, which have begun to raise interest rates to contain inflation.

The BOJ said it saw no need to tighten monetary policy in view of the recent rise in inflation. This was largely due to the rise in crude oil and commodity prices.

Kuroda said that the impact of the yen’s depreciation on inflation is “very small” and that monetary easing remains necessary. Even though Japan’s basic consumer price index (CPI) is likely to rise again to 2% in April or later.

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