The Bank of Japan Policy Board left its monetary policy unchanged Thursday amid strong signs of economic recovery.
After a two-day meeting, the Policy Board agreed on continuously injecting liquidity into the financial system to maintain the recovery trend and fight remaining deflation.
As a benchmark for the easy monetary policy, the nine-member board decided unanimously to keep its target for the outstanding balance of banks’ deposits at the central bank to a range between 30 trillion yen and 35 trillion yen.
The board also agreed to study a system of “securities lending” to stabilize bond markets. Under the system, the BOJ could increase market liquidity by temporarily providing government bonds it owns to markets.
BOJ Gov. Toshihiko Fukui told a news conference later in the day that the board’s decision to keep monetary policy intact was based on data showing the nation’s economy is gradually recovering. He cited the real 1.7 percent growth in the gross domestic product for the October-December period.
“The current monetary policy is appropriate, considering the stable monetary markets and the economic recovery,” Fukui said.
The BOJ will assess the GDP in the January-March quarter to judge the strength of the nation’s economic recovery, he said.