BOJ likely to keep ultraloose policy


The Bank of Japan is expected to maintain its ultraloose monetary policy introduced in April and keep intact its assessment of the economy as “recovering moderately” at its two-day policy meeting from Wednesday, sources said Monday.

In judging the state of the domestic economy, the nine-member Policy Board is likely to discuss personal consumption, whose recent strength appears to have paused as a consumer confidence index deteriorated in October.

The central bank board is also likely to inspect the development of exports as their recovery has been slowing down due to deceleration in overseas economies, the sources said.

In April, the BOJ initiated large-scale monetary policy centering on doubling the monetary base and boosting purchases of government bonds to attain an inflation target of 2 percent in about two years.

BOJ Gov. Haruhiko Kuroda has said that the bank’s monetary easing has been generating its intended positive effects and that the bank is steadily advancing on the path to achieve the price target, as consumer prices have started rising.

In September, for the fourth straight month Japan’s consumer prices rose — 0.7 percent from a year earlier — due to higher electricity and gasoline prices as well as increases in some durable goods prices.

But skepticism remains within the Policy Board, as three members voiced opposition to the outlook report released last month, with two of them calling for revising the expression that “Japan’s economy is judged as likely to achieve around 2 percent inflation” from the end of fiscal 2014 through fiscal 2015. The other one proposed adoption of a description that puts more emphasis on downside risks.

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