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BoJ in 'wait-and-see' mode, removes negative rates language

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Following last month's surprising decision, today's Bank of Japan monetary policy meeting saw no changes, keeping the interest rate at -0.1% and maintaining 80 trln yen base money target. The vote on negative rates was 7-2, while the vote on more asset purchases was 8-1.

    Headlines

    Maintains 80 trln yen base money target and 0.1 pct negative interest rate

    To review once every 3 months ratio of reserves for which negative interest rate will be applied

    BOJ says will exempt money reserve funds (MRF) from negative interest rates

    Removes language from its statement that it will cut interest rates further into negative territory if judged necessary

    BOJ will take additional easing steps in 3 dimensions of quantity, quality and interest rate, if needed to hit price target

    Economy continues to recover moderately as a trend

    Pickup in exports has recently paused

    Industrial production has continued to be more or less flat

    Inflation expectations rising from longer-term perspective but have recently weakened

    Japan's economy likely to expand moderately as a trend
    Uncertainty on emerging economies, impact of fed policy on markets among risks to outlook

    Global markets have remained volatile

    Must pay attention to risk that market volatility hurts business confidence, delays a shift from deflationary mindset

    Will apply zero rates to twice the size of increase in loans banks offer under boj's loan support programme

    Exemption of MRF from negative rate will take effect from May
    For more information, read our latest forex news.
     

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