BOJ expected to keep monetary policy stable as government releases trade data

BOJ expected to keep monetary policy stable as government releases trade data

Today the board of governors of the Bank of Japan will convene for its monthly policy meeting. The country’s central

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Photo: Reuters

Today the board of governors of the Bank of Japan will convene for its monthly policy meeting.

The country’s central bankers are expected to keep current interest rates and the BOJ’s quantitative easing program at current levels. It follows the August meeting, where the BOJ changed its current program of quantitative easing due to market concerns that it was running out of options in its campaign to lift inflation to 2%. The BOJ’s monetary policy has been conducted in an economic environment where some Western nations are seeing rising inflation and lifting interest rates in response. Plans to increase the national sales tax next year to 10% will be monitored closely by the board of governors for impacts on inflation and changes in spending behaviour by Japanese consumers.

The world’s third largest economy continues to show signs of tepid export and inflation growth due to an uncertain global trade environment caused by new tariffs on trade between the US and China. Exports are forecast to have risen roughly 5%, with imports rising double digits due to higher oil prices. The sluggish pace of growth is of concern for policy makers, due to elevated expansion occurring in the global economy. Expect BOJ and government policy makers to outline plans to bolster growth for the current quarter.

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