BOJ Seen Skipping Deeper Negative Rates This Week

Politics

Tokyo, Oct. 28 (Jiji Press)--The Bank of Japan is unlikely to deepen negative interest rates at a two-day monetary policy meeting from Wednesday, as domestic demand including business investment remains firm.

The BOJ, meanwhile, is seen slightly lowering its economic growth and inflation projections in a quarterly report to be released after the meeting, believing that the global economic recovery is being delayed due partly to the prolonged U.S.-China trade war.

BOJ policymakers are also expected to discuss other policy options, such as a revision to its forward guidance, which says the bank intends to keep short- and long-term interest rates at extremely low levels "at least through around spring 2020."

Governor Haruhiko Kuroda has indicated the central bank's willingness to push down interest rates deeper into negative territory.

But at the moment, the dominant view within the BOJ is that the easing option should be reserved for later consideration, given the need to scrutinize the effects of the Oct. 1 consumption tax hike. In addition, the yen has been relatively stable around 108 to the dollar.

[Copyright The Jiji Press, Ltd.]

Jiji Press