The Bank of Japan kept monetary policy steady on Thursday and offered a slightly more upbeat view of the economy than in July, suggesting that no immediate expansion of stimulus was needed to combat the coronavirus pandemic.
But the central bank warned of various risks to the outlook and repeated its readiness to ramp up monetary support “without hesitation” should the pandemic’s woes derail Japan’s recovery.
“Japan’s economy remains in a severe state but has started to pick up as business activity gradually resumes,” the BOJ said in a statement announcing its widely expected decision to keep monetary settings unchanged.
At the two-day rate review that ended on Thursday, the BOJ maintained its -0.1% short-term interest rate target and a pledge to guide 10-year government bond yields around zero. The decision was made by a 8-1 vote.
BOJ Governor Haruhiko Kuroda is expected to hold a news conference to explain the policy decision.
Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Chang-Ran Kim