The Bank of Japan said Wednesday its policy-setting panel decided to leave its ultraloose monetary policy unchanged.
While the decision was widely expected, with recent economic data showing cloudy prospects, it was the first time since January 2004 that the Policy Board did not make a unanimous decision.
The Policy Board decided to keep the target for the outstanding balance of banks’ deposits at the central bank within a range of 30 trillion yen to 35 trillion yen.
One of the nine board members was against the decision, indicating the central bank might be moving closer to changing its long-maintained policy, analysts said.
Market players expect that the BOJ will eventually lower the target, which analysts would view as a tightening of monetary policy.
The single voice of opposition on the Policy Board “means a move to change the policy finally started to appear,” said Hideo Kumano, senior economist at Dai-ichi Life Research Institute Inc. “But the move contradicts the current economic sentiment.”
Some analysts said it is unlikely the board will soon tighten its grip because the BOJ’s recent “tankan” survey was worse than many economists had expected.
Last week, the central bank said in its major survey that business confidence at Japan’s large manufacturers deteriorated sharply in the January-March quarter.
In the quarterly survey, the business confidence index for large manufacturers was 14, down for the second consecutive quarter and the lowest level in the past year.
A slower-than-expected recovery in the information technology sector and high oil prices dented corporate sentiment, despite hopes that the country’s economy would soon shake itself out of its lull, economists said.
BOJ Gov. Toshihiko Fukui told a news conference later in the day that the bank’s assessment of the economy has not changed.
“The economy continues to stay in a lull,” he said. “We don’t see any factors to change the view.”
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