The Bank of Japan decided Monday to leave its “zero-interest-rate” policy unchanged, the central bank said.
The decision was made by a majority vote at a meeting of the BOJ’s nine-member policy board.
Calls for discontinuing the zero-rate policy are growing among policy board members due to increasing signs of a pickup in Japan’s economic activity.
For example, the nation’s gross domestic product in January-March grew 2.4 percent from the previous quarter, helping the Japanese economy expand 0.5 percent in fiscal 1999 — the first growth in three years.
Accordingly, heated arguments for and against an end to the policy might have been exchanged during Monday’s board meeting of nearly seven hours, BOJ watchers said.
Arguments for maintaining the policy eventually prevailed because employment and income have not yet recovered, despite improvement in corporate activities such as capital spending.
While the BOJ maintains it will discontinue the zero-rate policy when deflationary concerns abate, the central bank is paying especially strong attention to the state of employment and income, the watchers said.
Under the zero-rate policy adopted in February last year, the BOJ has kept steering its target rate for unsecured overnight call money as low as possible to boost the economy.