Japan''s central bank keeps super-low rate, loan programs for disaster-hit.
key interest rate unchanged at a range of zero percent to 0.1 percent and to
extend by six months its emergency loan program for disaster-hit regions.
At the end of a two-day policy meeting, Bank of Japan's (BOJ) Governor
Masaaki Shirakawa and his eight board colleagues voted unanimously to keep the
unsecured overnight call loan rate on hold, a level unchanged since October
last year. The BOJ committed to "continuing the virtually zero interest rate
policy until it judges that price stability is in sight," the central bank
said in a statement after the meeting.
The BOJ also decided to extend until the end of April 2012 its JPY 1
trillion (USD 13.1 billion) low-interest loan program for financial
institutions in areas affected by the March 11 earthquake and tsunami and the
subsequent nuclear emergency. As of the end of September JPY 448.9 billion
(USD 5.9 billion) had been provided.
But the central bank refrained from additional monetary easing measures
despite the recent rise of the yen against the dollar and euro. A strong yen
will worsen export profitability and affect earnings for exporters, as it
makes Japanese products more expensive overseas.
The BOJ also raised its assessment for September, saying, "Japan's economic
activity has continued picking up." It also said production and exports have
continued to increase, although their paces have moderated.
The BOJ said the world's third-biggest economy is expected to "return to a
moderate recovery path, backed by a moderate increasing trend in exports and
by a rise in domestic demand for restoring capital stock." However, it pointed
out risks to the economic outlook, such as the US economy and the possible
consequences of the sovereign debt problems in Europe.
Speaking to the reporters after the meeting, BOJ Gov. Shirakawa said the
central bank will pay a close attention to the negative impact on the Japanese
economy from a strong yen and the European sovereign debt problems. "I'm
concern that the yen's surge would lead Japanese companies to move their
production facilities abroad," said Shirakawa.
All KUNA right are reserved 2011.
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