TOKYO, Jan. 31 (Xinhua) -- The Bank of Japan (BOJ) on Tuesday decided to maintain its aggressive monetary easing measures, including its negative interest rate and purchasing of government bonds and assets.
In a statement released after the conclusion of its monthly policy meeting, the central bank said it will continue to apply a negative interest rate of minus 0.1 percent to the policy rate applicable to some reserve funds held by commercial banks at the BOJ.
The bank said it will maintain its purchasing of Japanese government bonds (JGBs) so that 10-year JGB yields will remain at around zero percent, with the bank to conduct purchases at more or less the current annual pace increase in the amount outstanding of its JGB holdings of about 80 trillion yen (704 billion U.S. dollars).
The central bank also said its JGB yields will remain at around zero percent and the bank will purchase exchange traded funds and Japan real estate investment trusts so that their amounts outstanding will increase at annual paces of about 6 trillion yen and 90 billion yen, respectively.
At the monetary policy meeting, the bank said that in terms of the outlook for Japan's economy, it is likely to continue growing at a pace above that of its potential through fiscal 2018, owing to the bank's "highly accommodative" financial conditions and the effects of the governments large-scale stimulus measures.
In addition, the bank lifted its assessment on the real economic growth forecast for fiscal 2017 to 1.5 percent from its earlier forecast of 1.3 percent.
Growth for fiscal 2018, meanwhile, was upgraded from 0.9 percent to 1.1 percent.
"Comparing the current projections with the previous ones, the projected growth rates are somewhat higher, mainly reflecting improvement overseas and the yen's depreciation," the BOJ said in the report.
As for prices, the central bank said Japan's core consumer price index, excluding volatile fresh food prices, is forecast to rise 1.5 percent in fiscal 2017 and 1.7 percent in fiscal 2018.
The Statistics Bureau said on Jan. 27 that Japan's consumer prices dropped for the first time in four years in 2016, by 0.3 percent from a year earlier.
It shows that the country is still grappling with deflationary pressure despite the bank's aggressive monetary easing measures to reflate the nation.
Regarding downside risks to Japan's economy, the bank concluded at its meeting Tuesday that there remains uncertainty regarding developments in overseas economies, particularly in respect to the U.S. economy and the future course of its monetary policy and the impact it may have on financial markets.
Economists here said that along with market players, they will be keenly eyeing a press conference later in the day from BOJ Governor Haruhiko Kuroda, for hints about possible tapering measures. (1 Japanese yen = 0.0088 U.S. dollar)
