BOJ to discuss next steps to exit ultra

 人參與 | 時間:2025-01-05 20:07:19

The Bank of Japan will kick off a two-day meeting on Tuesday to decide on plans to reduce its purchases of government bonds. A possible hike in its interest rate is also on the agenda as part of the moves to tighten monetary policy.

The central bank has been buying about 6 trillion yen, or nearly 39 billion dollars, of government bonds a month. It is expected to gradually trim these purchases over the next 1 to 2 years.

BOJ officials have discussed the plan with financial institutions to assess the best pace of the withdrawal.
Some institutions say the BOJ should cut its bond buying to 4 trillion yen a month. Others suggest 2 to 3 trillion yen is appropriate.

BOJ policymakers are also expected to discuss the timing of a possible increase in its key interest rate.
The central bank raised the rate in March for the first time in 17 years as it ended a negative interest rate policy.

BOJ Governor Ueda Kazuo has indicated intentions to raise the rate if inflation is sustained around the bank's 2 percent target.

Some in the central bank are said to be supporting an additional hike as the weaker yen is making imports more expensive and adding to inflation pressure.

However, Japan's inflation-adjusted wages have declined for 26 months in a row. Other bank officials say this trend needs further study before raising rates.

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