Bank of Japan Fight Deflation
Bank May 24th, 2010
TOKYO – Meeting discussion conducted monetary policy the Central Bank of Japan (Bank of Japan / BoJ) indicates a stop-gap measure to spur economic recovery. All this is a barrier is the rate of deflation and weak demand.
Many people hope that the BoJ rate remained at 0.1 percent level, as has been done since December 2008. This is to keep running so as to sustain the credit growth.
BoJ being confronted turunya consumer price index (CPI) for almost a year, is also considering to extend short-term loan facilities to companies and households, became six months.
Japanese media reported that the Central Bank will inject fresh funds of up to 20 trillion yen (equivalent to USD222 billion) into the local financial markets.
Meanwhile, the yen continues to move sharply higher. This becomes an important record in Japan’s economic prospects. Prime Minister of Japan Yukio Hatoyama has also been urging stern steps to stem yen strength.
Just FYI, BoJ officials meeting came after the central bank urged governments to exert all efforts to reduce deflation. The risk of deflation can lead to reduced corporate profits and push economic activity as consumers delay spending. At the end of economic growth will be slowed.
“I hope the parliamentary session today will find a way to combat deflation,” said Minister of Finance of Japan Naoto Kan, as quoted by AFP, Tuesday (16/3/2010).
It suggests that he wants Japan to push deflation until the end of the year. How, with encouraging early deadlines from BoJ estimates for two years.
Just FYI, Japan plunged into recession in 2008, as the impact of the decline in the global economy. However, economic growth returned in the second quarter last year.
