BOJ Keeps Policy Rate Unchanged at 0.5 Pct

Tokyo, Sept. 19 (Jiji Press)–The Bank of Japan decided to maintain the policy of guiding the unsecured overnight call rate, Japan’s benchmark short-term interbank lending rate, to around 0.5 pct, at a two-day Policy Board meeting that ended Friday. The decision was made by a vote of seven to two. Also at the meeting, the BOJ Policy Board decided to sell to the market exchange-traded funds (ETFs) and Japanese real estate investment trusts (J-REITs) that the central bank had purchased as part of its large-scale monetary easing program, taking another step toward normalizing monetary policy. This decision was made unanimously. After raising the policy interest rate from 0.25 pct to 0.5 pct in a decision made in January, the BOJ has now kept it unchanged for five consecutive policy-setting meetings. The Japanese central bank is believed to have judged that it needs to assess the impact of U.S. President Donald Trump’s high tariffs policy on the domestic and global economies and monitor domestic political developments before determining the timing for raising the policy rate. The BOJ will begin selling ETFs at an annual pace of around 330 billion yen based on book value and J-REITs at an annual pace of some 5 billion yen once the necessary preparations are complete. The proportion of these sales will be kept at around 0.05 pct of total market trading volumes for both ETFs and J-REITs. END [Copyright The Jiji Press, Ltd.]