Japan Decides to Keep Interest Rates and Quantitative Easing Policy Unchanged... Steadfast Despite US Tightening (Update)

Emphasis on Economic Stimulus Despite Global Tightening
Unlimited Government Bond Purchase Policy Also Maintained

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The Bank of Japan (BOJ), Japan's central bank, has declared that it will continue its strong quantitative easing policies, including maintaining ultra-low interest rates and unlimited government bond purchases, despite tightening policy announcements from major countries such as the United States and Europe.

On the 17th, the BOJ announced the results of its monetary policy meeting, deciding to keep the benchmark interest rate unchanged at -0.1% and maintain its large-scale monetary easing policy of unlimited long-term government bond purchases. It is reported that 8 members voted in favor of maintaining the quantitative easing policy, while 1 member opposed.

The BOJ stated, "Although the consumer price index (CPI) inflation rate has reached the target range of 2%, the main cause of the price increase is external factors such as rising energy prices, which we judge to be unsustainable, so we will adhere to the existing quantitative easing policy."

The BOJ's stance on maintaining quantitative easing is expected to contrast with the tightening policies of major central banks such as those in the United States and Europe. Earlier, the U.S. Federal Reserve (Fed) declared a so-called 'Giant Step,' raising the benchmark interest rate by 0.75 percentage points for the first time in 28 years.

Immediately after the Fed's announcement, the Bank of England (BOE) announced a 0.25 percentage point increase, and even the Swiss National Bank (SNB), which had maintained quantitative easing policies, raised interest rates by 0.50 percentage points for the first time since 2007. It is reported that more than 45 countries worldwide have announced interest rate hikes so far this year.

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