TOKYO — The Bank of Japan left policy unchanged Friday, maintaining its aggressive monetary stimulus aimed at lifting inflation, which continues to show weakness despite brighter spots elsewhere in the economy.
The decision reaffirming the central bank’s ultra-easy stance comes less than two days after the Federal Reserve raised interest rates for the third time in six months despite renewed weakness in U.S. inflation. The Fed also gave more details on how it plans to trim its balance sheet, a topic that Japan’s central bank is gradually starting to talk about after months of insisting that it was still too early to discuss.
The BOJ board voted to keep its target for 10-year Japanese government bond yields at around zero and a shorter-term interest rate at minus 0.1%, as widely expected by economists.
The bank also reiterated that it would continue to buy government bonds at an annual pace of about ¥80 trillion ($720 billion). Controlling short- and long-term interest rates has become the bank’s principal policy tool since a revamp of its measures last September, but the passage on its bond purchases is seen by investors as a symbolic gauge of the bank’s commitment to its easing policy. The actual rate of purchases has fallen well below the ¥80 trillion annual pace in recent months.
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