Japan's central bank on Friday said it was keeping its ultra-loose monetary policy in place, in keeping with expectations, as the world's third-largest economy struggles to rekindle growth. The Bank of Japan's massive monetary easing programme is a cornerstone of Prime Minister Shinzo Abe's "Abenomics" campaign to kickstart the economy after years of torpid growth.
The decision comes as inflation remains stubbornly low, with Japan struggling to combat fears of deflation. The central bank has failed to achieve the two percent inflation rate target, which is thought crucial to boosting the economy, even though Japan has notched up eight straight quarters of growth. "We think that the timing of achieving the two percent inflation rate target is likely to be around fiscal 2019," BoJ Governor Haruhiko Kuroda told a press conference Friday afternoon.
"We need to persist with the monetary easing policy to realise the inflation target," he said, but added that Japan is still "far away" from achieving the two percent goal. "So we're not in a situation where we can discuss the timing of exit policy." Kuroda, 73, was nominated last month for a second five-year term as central bank governor.
"When I heard that the government was planning to reappoint me, I thought I wanted to do my best to achieve the target," he said. The bank's decisions - after a two-day meeting - came just hours after it was announced that US President Donald Trump would hold a historic meeting with Kim Jong Un in a stunning development in America's high-stakes nuclear standoff with North Korea. It also comes as worries of a global trade war build after Trump signed steep tariffs on steel and aluminium imports Thursday, a measure Japan called "regrettable".
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