Bank of Japan keeps monetary easing policy despite U.S., Europe rate hikes

Oh dear. Putting corporate profits before the Japanese public. Looks like the Japanese economy is heading for 'lost century' status.

When they finally do something about interest rates, it will be too late and pain will be everywhere except for the stinking rich. The Japanese way for everything.

Tightening monetary policy/raising interest rates would have very little effect on inflation in Japan anyway. The only effect it might have is to strengthen the yen slightly and offset increasing prices of imports and raw materials. Kuroda has pretty much ruled that out. Sit pat and watch stagflation run its course

Well, none of this affects me! One of the perks of having no money anyways...!

The Japan gov would rather tank the economy...

This is a policy of the Bank of Japan, not the government.

Clueless, but wait for the election then you will see a North Korean level of clueless,

As history will tell us, this is the only correct course of action as the current inflation has nothing to do with interest rates. Fed and others are hurting their own people for nothing.

I have no money but I do get a tad bit hungry sometimes. Imported pumpkin just changed from ¥198 to ¥350...

The Yen is going to crash. It will make exports very cheap to help exporters, but importers, in-bound tourists, and people paying foreign-denominated payments (my kids' university tuition....) will really feel the pinch.

Raising interest rate is only something US willing to do to it's own people. It makes people lives there even harder. Borrowing interest increased, loans becomes harder to repay, use of credit cards becomes more expensive and you can forget about your mortgage. Raising interest rate is something you do to increase the expenses of service so much to make people become less willing to spend money and go into saving mode and therefore lowering the demands of goods. This is suppose to then help cooling down inflation.

But here is japan the whole purpose is to have people stop going into saving mode and instead increase demand. What they want is more spending.

US has been raising interest rate for months now. Their inflation is not stopping at all, so there is no way we should follow their example. Their gap between rich and poor is becoming a huge chasm. Anyone who think BOJ should do what US doing is crazy. Is makes things even worse for those who owned independent businesses.

Chabbawanga

Today 05:01 pm JST

Oh dear. Putting corporate profits before the Japanese public. Looks like the Japanese economy is heading for 'lost century' status

Really?

Not let me see:

Oil prices up, wheat price up, all other food items up so families are all ready having a hard time paying bills.

So the logical thing to do according to the "experts" is to hike interest rates, that way the banks, money Leander can hike their rates so that mortgage payments and then soon to follow rents also go up.

Yep that sounds exactly what my family needs right now higher mortgage payments!

Nemo

Today 07:41 pm JST

The Yen is going to crash. It will make exports very cheap to help exporters, but importers, in-bound tourists, and people paying foreign-denominated payments (my kids' university tuition....) will really feel the pinch

In-bound Tourist will love the low yen, as their foreign currency will buy more while they are here.

As for making payments to your overseas university, well change to a domestic one, that was your choice.

Now look at the positive side:

More tourist willing to spend in Japan stay longer spend more, more exports means more jobs, more tourists, more jobs means better situation for more Japanese.

Oh and let's not forget higher interest rates means higher mortgage payments and higher rents to add to higher food, gas electricity, etc...great for banks, and the very big food , oils and power corporations

Damned if you put interest rates up, damned if you don't. But obviously the BOJ doesn't care about the yen, which somebody today described as a joke currency. There's nothing to be done now, the yen is terminal, on a par with the Zimbabwe dollar! Still, I was immensely cheered today to see that the Swiss National Bank raised interest rates, first time since 2007, which caused the value of the Swiss Franc to rocket upwards. More please, I just love the Swiss Franc!

Rodney

Today 07:30 pm JST

I have no money but I do get a tad bit hungry sometimes. Imported pumpkin just changed from ¥198 to ¥350.

Where do you live?

The yaoya near my house was ¥280 and it is known to be expensive.

Komatsuna was ¥100 2 packs, large Daikon was ¥180.

The discount supermarket Kabocha was ¥210, komatsuna was a larger pack ¥100, large Daikon was ¥150.

BTW Kabocha is always expensive this time of the year, the price drops in the fall been that way as long as I have been in Japan over 30 years.

@Antiquesaving have you thought about the cost of an airline ticket these days. Do you really think people will travel and that will boost Japans economy. Ok it might help a little but they will need more than tourism.

umbrella

Today 08:43 pm JST

Zimbabwe are you serious.

Ok let's get real not fantasy.

In over 30 years all I here from Foreigners is doom, the yen is crashing over and over again and nope, hasn't happened yet.

All I hear is how the "other" currency markets are making these foreigners money, not the yen.

News flash, the Japanese government doesn't care about some Gaijin's investment portfolio.

It's job is to insure the Japanese people have jobs, food and housing.

High Yen, high mortgage rates/rents, along with high oils, gas, electricity, and fewer jobs isn't going to do that.

So sorry good luck on your investment in Swiss Francs, the rest of us prefer daily lives of lower rent/mortgage payments and jobs.

Nationalists love isolation, and this helps. Most incoming tourists are blocked and a weak yen discourages Japanese from travelling abroad. It helps exporters but forces all but the well off to avoid imports - Sony smartphones rather than iPhones.

Fly in the ointment: Japan is a million miles from self-sufficient on energy and food, so retail inflation will skyrocket. At the moment this is only hitting the poorest, which governments don't care about. Once it hits the middle classes, they might start to worry a little more. But Japanese people still vote for the LDP in droves no matter how low the popularity polls, so I doubt Kishida is worried.

kaimycahl

Today 08:50 pm JST

@Antiquesaving have you thought about the cost of an airline ticket these days. Do you really think people will travel and that will boost Japans economy. Ok it might help a little but they will need more than tourism.

Ah yes!

Are you looking at it as someone in Japan going out or as someone coming here.

Think, if a ticket to South Korea from New York, is $1000 US and a ticket to Japan is the same, but the yen is lower the the South Korean Won, making hotels, Airbnb, restaurants, internal travel, etc...cheaper logically one is going to go where they can spend less and have more fun.

The Bank of Japan on Friday stuck to its monetary easing policy . . . to hold rates at minus 0.1 percent.

Not unexpected.

Also not unexpected was the decision to offer to buy unlimited amounts of the bonds to defend an implicit 0.25% cap every market day, repeating the guidance on market operations it made in April. Once upon a time it raised eyebrows. Now it is the market expectation. But the benchmark ten year bond yield fell toward 0.22%, thus moving away from the 0.25% implicit yield cap

It buys time. Policymakers opine that Japan's economy has picked up, and will continue to do so, what with private consumption, exports and industrial output growing modestly. Should any of the three of these start trending downward, or the 2% CPI outlook proves too optimistic, then the games changes, and the bank and ministry hope that they can catch the falling blade before it cuts too many people on the way down.

Because of all of the above, watch the yen for the next week or so. As of this writing, it is at 134.647. up 1 ½ % for the day, 5% for the month. And 22% YoY.

May we live in interesting times.

Wages are very low in Japan, but savings is very high compared to other countries. It is not uncommon for Japanese families to have 1-2 million USD in the bank at all times especially if they came from a well off family during the bubble. Usually live in a 70m2 apartment, and drive an old Toyota from 2003. I think in the short term, the Japanese govt wants people to use that cash they are hoarding, because usually in down times Japanese hoard even more. Already, at work, more and more men bringing bentos or cup noodle lunch.

Japan has been a bad investment for decades. All across the board. Real Estate, Bonds , Stocks, Weak dividends, lack of innovation in their financial sector for the general population......just sad to see it fall from what I witnessed in the 1980s. Opening a bank account, doing business, paying taxes in Japan is all horrible too. As the BOJ is now the last central bank standing as regards easy policy, it’s unsurprising that bets against the BOJ are building.

Wobot

Today 09:47 pm JST

So we should borrow money to buy gold?

If you want but I doubt it would be worth it but still better than the USA Fed which is borrowing $40 billion plus anoth $1.5 billion monthly to give to Ukraine, and it is borrowing from China, the only place willing to lend to it!

The Fed interest rates were lower than the rate the USA Fed was paying China for these new loans, I guess that has nothing to do with raising the rates, right?

Raising interest rate is only something US willing to do to it's own people. It makes people lives there even harder. Borrowing interest increased, loans becomes harder to repay, use of credit cards becomes more expensive and you can forget about your mortgage. Raising interest rate is something you do to increase the expenses of service so much to make people become less willing to spend money and go into saving mode and therefore lowering the demands of goods. This is suppose to then help cooling down inflation.

Japanese have no choice than to save for their retirement because their pension is very low. If inflation reach 3 % or more and interest rate remain at 0 % people will see their savings eaten by inflation and face a very bleak  future.

Japanese have no choice than to save for their retirement because their pension is very low. If inflation reach 3 % or more and interest rate remain at 0 % people will see their savings eaten by inflation and face a very bleak  future.

FOREX speaking, should I buy yen or dollars? Is it good to buy weak or sell weak, or vice versa?

Yep that sounds exactly what my family needs right now higher mortgage payments!

Poor you, with your house. How about those who will have actual problems like not making enough to put food on the table.

Buy a house in Tokyo and pay extortionate bank rates and inflated prices.

Why?

For some cramped space good for 40 years at the most and then it is knocked down?

Keeping the economy locked in a stimulatory cycle just blows prices out of proportion.

While the rest of the world is tightening, the demand for goods will be less.

Japan is not the major exporter of cheap goods as it used to be-where is the benefit?

And the weak yen might be beneficial for tourists;there aren’t any here though....

I mean if your making enough that the price chances don't affect you, then yeah, don't change a thing BOJ.

The majority of us ain't though. The idea that people will save and save and save, then suddenly decide to splurge to help rebound things has never worked though and it won't this time. When people have to tighten up the spending, they keep doing so because they HAVE to. There won't be a splurge if major purchases have to be planned for a significant amount of time beforehand.