Japan Central Bank Interest Rates Hold at 0.1%
Bank November 8th, 2009
Bank of Japan (Bank of Japan / BoJ) held its main rate at 0.1 percent level. No change in Japanese interest rates do to overcome deflation of the country that has the second largest economy on earth.
At the same time, the BoJ also revised estimate of economic growth will shrink by 2.5 per cent in this financial year until March before finally going to rebound by 1.3 percent next year.
“Japan’s economy took its main policy measures both within and outside the country. Although there is no momentum is sufficient to support recovery independently in domestic private demand,” he disclosed the BoJ said in a statement, as quoted by the AFP, Tuesday (26/1/2010 ).
In October, the BoJ has estimated the economic contraction of 3.2 percent in Japan where gross domestic product this year followed by a 1.2 percent expansion for next year.
Own central bank to maintain projected that Japan’s economy will see deflation during the next three years as returned from the worst downturn in decades. But the BoJ said that the possibility of prices going down than previously thought.
As for consumer prices fell 1.5 percent estimated in the current financial year, followed by a further decline in the next year by 0.5 percent and 0.2 percent next year.
In October it also projected consumer prices will fall from 1.5 percent this year, 0.8 percent next year, and 0.4 percent the year after that. “The bank admitted that it is the most important challenges for the Japanese economy to overcome deflation and back to a sustainable growth path with price menyetabilkan,” he added.
As is known, Japan stuck in a deflationary spiral for years after the asset price bubble that burst in early 1990. This is hitting corporate earnings and encourage consumers to delay purchases in the hope of further price falls.
The current global economic downturn and decline in commodity costs pushed the country back into deflation rate. Core consumer prices in November were recorded fall in year on year for the past nine months.
