BOJ Stands Pat Looking for Olympic Games to Support Growth

Japan’s central bank kept its ultra-lax monetary policy unchanged Thursday, forecasting that growth in the world’s third-largest economy would remain slow but steady through the fiscal year ending in March 2018.

Most analysts were expecting the Bank of Japan to stand pat. In a statement, the BOJ said demand spurred by preparations for the Tokyo 2020 Olympics will help support growth in the coming year or two.



But it warned of risks to that scenario from global trends, including U.S. economic policies, Britain’s exit from the European Union and other geopolitical trends.

“With regard to the outlook for economic activity, risks are skewed to the downside, particularly those regarding developments in overseas economies,” it said.

The Bank of Japan is pumping trillions of yen (tens of billions of dollars) into the economy each month through asset purchases intended to counter deflation and boost growth.

Results have been mixed, and inflation remains well below the 2 percent target set in 2013. The central bank adjusted its inflation forecast for this year to 1.4 percent from an earlier forecast of 1.5 percent.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza