Japan's central bank maintains monetary stimulus

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The Bank of Japan (BOJ) continues its pursuit of a lofty 2 percent inflation goal by deciding to maintain its ultra-easy, aggressive monetary policy on Thursday, amid stagnant wages and slow price gains.

Following its two-day policy board meeting, the BOJ voted to hold its short-term interest rates at minus 0.1 percent and keep its 10-year government bond yield to about zero percent through its bond buying program.

Japan's central bank also voted to maintain its purchases of assets, including exchange-traded funds (ETFs).

Despite the government heralding an escape from deflation and seven straight quarters of economic expansion, price gains have remained low at just 0.8 percent.

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Prices remain well below the BOJ's target and have been compounded by corporate profits not being converted into substantially higher wages, leading households to tighten spending which is impacting domestic consumption and investment.

This cycle has created a "deflationary mindset" in Japan, which is itself contributing to the sluggish pace of price increases.

The BOJ is continuing to hold onto its easing measures, included ultra-low interest rates, in contrast to other central banks like the US Federal Reserve and the European Central Bank (ECB) which have either raised rates or began tapering measures based on strengthening economies.

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Source(s): Xinhua News Agency