BoJ in 'Wait-and-See' Mode, Removes Negative Rates Language

BoJ in 'Wait-and-See' Mode, Removes Negative Rates Language

Following last month's surprising decision, today's Bank of Japan monetary policy meeting saw no changes, keeping the interest rate at -0.1% and maintaining 80 trln yen base money target. The vote on negative rates was 7-2, while the vote on more asset purchases was 8-1.

Headlines

Maintains 80 trln yen base money target and 0.1 pct negative interest rate

To review once every 3 months ratio of reserves for which negative interest rate will be applied

BOJ says will exempt money reserve funds (MRF) from negative interest rates

Removes language from its statement that it will cut interest rates further into negative territory if judged necessary

BOJ will take additional easing steps in 3 dimensions of quantity, quality and interest rate, if needed to hit price target

Economy continues to recover moderately as a trend

Pickup in exports has recently paused

Industrial production has continued to be more or less flat

Inflation expectations rising from longer-term perspective but have recently weakened

Japan's economy likely to expand moderately as a trend
Uncertainty on emerging economies, impact of fed policy on markets among risks to outlook

Global markets have remained volatile

Must pay attention to risk that market volatility hurts business confidence, delays a shift from deflationary mindset

Will apply zero rates to twice the size of increase in loans banks offer under boj's loan support programme

Exemption of MRF from negative rate will take effect from May


(Market News Provided by FXstreet)