BOJ Holds Monetary Policy Steady, Highlights Decline in Industrial Production
As was widely expected, the Bank of Japan (BOJ) held its monetary policy steady at its latest meeting earlier today, and even expressed optimism about the state of the economy. However, the BOJ sounded more pessimistic about factory output than it did in its last meeting back in October, in the face of continued weakness in global demand and the ongoing trade war.
Japan’s central bank also highlighted the impact of recent natural disasters in driving the weakness in industrial production lately. In October, the bank had indicated sideways movement in industrial production as opposed to the decline mentioned this time around.
The BOJ has decided to hold its short-term interest rates around -0.1% and the 10-year government bond yields near 0%. The BOJ also anticipates the trend of moderate growth in Japan’s economy to continue.
Japan’s economy has continued to grow at 1.8% YoY in Q3, supported by strong domestic demand and business spending. However, its export-oriented economy has suffered under the prolonged trade war as China is one of its key trading partners.
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