Bank Of Japan Announced Policy Changes

Economy Jamie Simon
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The Bank of Japan decided a policy change in the monetary policy session on Wednesday, with the main objective being the level of interests and less printing money in order to achieve a higher level of inflation, writes Reuters.

After a monetary policy meeting of two days that ended on Wednesday, the Bank of Japan abandoned the monetary base target.

The institution adopted, instead, a control policy in interest rates, which involves buying Japanese government bonds to keep long-term yields on a ten-year bonds near the current level of 0%.

The Japanese central bank kept interest rates at 0.1% which applies to the deposit facility,for example for banks that have excess liquidity and place the money in deposits at the central bank.

The institution will also continue to buy long-term bonds issued by the Japanese at a pace that will ensure an increase in holdings to 80,000 billion yen (781 billion dollars) per year.

The bank focuses more on the target to increase the rate of inflation in Japan, a country affected by long deflation, so close to the target of 2%.

The Japanese stock market rose and the yen depreciated after announcing decisions, but some analysts doubt that the measures will have a positive lasting on the markets.

What happens in Tokyo could become a model for other large central banks of the world. The measures we take Japanese could be followed not by a very long time and American counterparts.

Haruhiko Kuroda, president of the Japanese central bank announced that on Wednesday he will present a report reviewing the unwelcome effects of the interest that has generated negative politics and especially how the bank wants to remedy or restrain these slippages.