Bank of Japan keeps monetary policy steady, pledges to increase monetary base at annual pace of 80 trln yen

  • Keeps assessment of Japan's economy unchanged
  • Says business sentiment has stayed at favourable level, but cautious developments have been observed in some areas
  • Policy decision was made by 8-1 vote
  • BOJ board member Kiuchi proposed tapering annual jgb purchases to 45 trln yen, which was turned down by majority vote
  • Kiuchi proposed keeping asset buying, zero rates for as long as needed under flexible price target, which was turned down by 8-1 vote

Quick Headlines via Reuters

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The yen has strengthened.... but that's old hat now ... it did so sharply well before the announcement was ... errr .... announced.

Leak, anyone?

More (via Bloomberg):

  • Some cautiousness in business sentiment in some areas
  • Business sentiment has stayed at favorable level
  • BOJ sees economy continuing to recover moderately
  • CPI likely to be about 0% for time being
  • Easing is exerting intended effects
  • Inflation expectations rising from longer-term view
  • BOJ votes 8-1 to keep monetary base target unchanged
  • To continue QQE until stable 2% inflation maintained
  • Says to watch risks, adjust policy as appropriate
  • Japan's economy has continued to recover moderately

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OK folks, so there you have it.

The economy is continuing to recover moderately and policy is left unchanged, as expected.

No, I don't know what data the BOJ is looking at either ... it can't be the most recent stuff that has taken a clear turn for the worse.

Anyway ... The next meeting is October 30, when revised forecasts will be issued by the bank and market expectations will be much higher for further easing.

Meanwhile, if you haven't done so already, check out the yen move about 20 minutes before the official announcement. Suspicious? You tell me ... (where is that rolly-eye emoticon...?). But ... maybe it was just 'cause the meeting finished more or less at the expected time. It was only if it went late that expectations would have risen for a change in policy.