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BOJ stands pat, revises down economic view
[TOKYO] The Bank of Japan kept monetary policy steady on Tuesday, preferring to spend more time gauging the impact on the economy of its decision in January to deploy negative interest rates.
As widely expected, the central bank maintained its pledge to increase base money at an annual pace of 80 trillion yen (US$700 billion). It also left unchanged a 0.1 per cent negative interest rate it applies to some reserves financial institutions park at the BOJ.
The BOJ also decided to exempt money reserve funds (MRFs) from the minus 0.1 per cent rate and instead apply a rate of zero starting in May. "Japan's economy continues to recover moderately as a trend, although exports and production have been sluggish due mainly to the effects of slowing emerging markets growth," the BOJ said in a statement announcing the policy decision, offering a slightly bleaker view than in January.
BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision.
The BOJ unexpectedly cut a benchmark interest rate below zero in January, stunning investors with another bold move to stimulate the economy as volatile markets and slowing global growth threaten its efforts to overcome deflation.