Business News Asia
The Governor of the Bank of Japan (BOJ) stated that rising commodity prices are putting additional pressure on the Japanese economy and the BOJ must maintain its ultra-low interest rate policy to help the weak Japanese economy recover.
The BOJ insisted on a low-interest-rate policy, although this policy was seen as the reason why the yen fell to a 32-year low against the dollar.
Market participants predict that interest rate differentials between Japan and the U.S. will widen as the two central banks pursue opposing policies. The U.S. Federal Reserve continues to raise interest rates to contain inflation, while the BOJ maintains its policy of monetary easing.
The Japanese prime minister told a parliamentary session that he encourages the BOJ to continue its policy of monetary easing to achieve a stable and sustainable inflation target of 2%.
At the BOJ’s last meeting on September 22, the BOJ Committee decided to maintain the ultra-loose monetary policy and leave the key interest rate unchanged at -0.1%. The target for the yield on 10-year government bonds is 0%.