Economics
Bank of Japan's Dovish Bent Shows Asia's Policy Divergence
- Few signs region’s central banks are in a hurry to tighten
- Lack of inflation undermines case for higher interest rates
BOJ Delays Timing for Reaching 2% Inflation Target
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The Bank of Japan’s determination to press on with its unprecedented monetary stimulus leaves it out of step with developed world peers, which are either raising rates or debating how to start normalizing policy.
Yet in its own region -- Asia -- the BOJ is far from alone. While the People’s Bank of China is turning to open market-operations and lending tools to curb excessive leverage in parts of the financial system, it’s holding benchmark rates at all time lows to keep growth humming. Slowing inflation in India has put the prospect of more easing back on the table, and the regions’ smaller central banks are also signaling no rush to raise borrowing costs.