BOJ Stands Pat

The Bank of Japan refrained from adding measures to expand liquidity as it gauges the risk the yen’s advance poses to the nation’s export-led rebound.

The policy board headed by Governor Masaaki Shirakawa kept the benchmark overnight rate unchanged at 0.1 percent and maintained its credit programs for lenders by a unanimous vote, the central bank said in Tokyo today.

Executives and politicians in the past week have voiced concern about the yen, which is approaching a 15-year high, saying it threatens an already weakening economic recovery. Policy makers may provide stimulus should uncertainty about the global economy unsettle currency markets, according to economist Yoshiki Shinke.

“The bank hasn’t changed its view of the economy so it isn’t considering easing policy now,” said Shinke, a senior economist at Dai-Ichi Life Research Institute in Tokyo. “But market conditions may not allow them to stay pat” if U.S. policy makers ease policy, putting pressure on the yen, he said.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell