Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

BOJ Rejects Keeping Virtually Zero Rates Until Price Goal Near

BOJ Rejects Keeping Virtually Zero Rates Until Price Goal Near
Commercial buildings and retail stores stand illuminated at night in the district of Akihabara in Tokyo. Photographer: Noriko Hayashi/Bloomberg

Feb. 14 (Bloomberg) -- The Bank of Japan rejected a proposal for keeping interest rates virtually at zero until a price target is in sight and refrained from adding to stimulus, ahead of leadership changes next month.

The central bank kept its asset purchase fund unchanged at 76 trillion yen ($813 billion), according to a BOJ statement released in Tokyo today. That was in line with analysts’ forecasts. Policy makers rejected board member Ryuzo Miyao’s call for the pledge on rates.

A report today showing that gross domestic product shrank for a third straight quarter strengthens Prime Minister Shinzo Abe’s case for boosting fiscal and monetary stimulus to counter deflation and revive the world’s third-biggest economy. BOJ Governor Masaaki Shirakawa and two of his deputies are set to step down on March 19, leaving behind a global debate on whether Japan’s government is triggering an excessive depreciation in the yen.

“The BOJ will probably wait until the installment of new leadership,” said Takeshi Minami, chief economist in Tokyo at Norinchukin Research Institute Co. “Whoever takes the position, the BOJ will have to be more aggressive to help the economy as Abe is eying elections.”

Twenty analysts surveyed by Bloomberg News predicted no easing after the bank pledged last month to begin open-ended asset purchases in January 2014 and set a 2 percent inflation target. The central bank kept its key interest rate unchanged between zero and 0.1 percent and monthly purchases of government bonds at 1.8 trillion yen, today’s statement showed.

To contact the reporters on this story: Masahiro Hidaka in Tokyo at mhidaka@bloomberg.net; Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.