Connect with us

Hi, what are you looking for?

Capital Business
Capital Business

World

BoJ vows to step up fight against deflation

TOKYO, Dec 18 – Japan\’s central bank said on Friday it was vital for the world\’s number two economy to break out of deflation as it maintained its super low interest rates steady to fight consumer price falls.

The Bank of Japan maintained its assessment that the economy is gradually recovering from its worst slump in decades, as it held its benchmark lending rate unchanged at 0.1 percent, where it has been since December 2008.

"Japan\’s economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand," it said in a statement.

At the same time the Bank voiced increased concern about deflation, which hurts corporate profits and encourages some consumers to put off purchases in the hope of getting a lower price in the future.

In unusually strident remarks, the BoJ said that it "does not tolerate" falls in consumer prices.

"The Bank recognises that it is a critical challenge for Japan\’s economy to overcome deflation," the statement said, adding that that BoJ would "maintain the extremely accommodative financial environment."

Japan\’s core consumer prices fell 2.2 percent in October from a year earlier, marking an eighth straight month of drops.

The BoJ, under pressure from the government to step up the fight against deflation, decided earlier this month to pump 10 trillion yen (112 billion dollars) into the financial system through a new loan facility.

Japan\’s economy returned to positive growth in this year\’s second quarter after a severe year-long recession.

Advertisement. Scroll to continue reading.

But the government reported last week that the world\’s number-two economy grew at a much slower rate than previously thought in the third quarter, re-igniting fears that the fledgling recovery could stall.

Japan\’s government recently announced a fresh economic stimulus package of 274 billion dollars, including 80 billion dollars in new spending, to ward off a potential double-dip recession.

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...