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BOJ keeps policy steady; newcomer signals desire for future easing
[TOKYO] The Bank of Japan kept monetary policy steady on Tuesday even as it slightly cut its inflation forecast for the current fiscal year, signalling its conviction a solid recovery will gradually accelerate inflation toward its 2 per cent target.
But new board member Goushi Kataoka dissented from the BOJ board's decision to maintain its interest rate targets, arguing that the BOJ should buy government bonds so that 15-year JGB yields would remain at less than 0.2 per cent.
"If there were a delay in the timing of achieving the price target due to domestic factors, the BOJ should take additional easing measures," Mr Kataoka said, according to a statement by the central bank on its policy decision.
Mr Kataoka did not make any proposal to top up stimulus, however, defying expectations he could do so after his decision last month to vote against keeping policy steady.
In a widely expected move, the BOJ maintained the 0.1 per cent interest it charges on a portion of excess reserves that financial institutions park at the central bank.
At the two-day policy meeting that ended on Tuesday, it also kept its yield target for 10-year Japanese government bonds around zero per cent.
The decision on maintaining interest rate targets was made by an 8-1 vote.
BOJ Governor Haruhiko Kuroda will hold a news conference at 3.30pm (0630 GMT) to explain the policy decision.