Japan keeps key interest rate at 0.1% as U.S., Europe tighten
- 6 years ago
美•유럽 '돈줄 조인다'... 日은 일단 관망
Following the U.S. Federal Reserve and European Central Bank's moves to tighten their monetary easing, Japan is leaving its fiscal policy unchanged.
The BOJ also plans to keep its key interest rate steady, and go ahead with quantitative easing as scheduled.
Choi Si-young has the full story.
The Bank of Japan said Friday that it will keep its key interest rate at minus zero-point-one-percent, the same it's been since January 2016.
It'll also continue its quantitative easing program... until the consumer price index rises by zero-point-two percent over the year before.
The central bank reiterated that it still sees the Japanese economy gradually growing.
In contrast, the U.S. decided this week to raise rates, and the European Central Bank said it would be winding up its quantitative easing.
"We will continue to make net purchases under the APP (asset purchase programme) at the current monthly pace of 30 billion euros until the end of September 2018."
ECB President Mario Draghi said the massive bond-buying program will be phased out by the end of this year.
It had started in 2015... to help the Eurozone recover from the debt crisis that began in 2009.
However, the bank is keeping its main interest rate at its current record low of zero-percent at least through the summer of 2019 to bring down inflation.
The U.S. announced the most aggressive fiscal policy, raising its key rate for the second time this year, and the seventh time since 2015.
This time, the Fed went a step further and retracted its earlier statement that it will keep rates low enough to stimulate the economy.
Fed Chairman Jerome Powell expressed confidence in the US economy, citing strong consumer spending and investment.
With the US and Europe pulling back on monetary easing, and Japan waiting to see how things go, emerging economies have seen their currencies weaken against the dollar due to rapid capital outflows. South Korea is also on alert.
"Despite the U.S. and ECB's moves to tighten monetary easing, South Korea has relatively ample foreign reserves, so there won't be huge financial instability. Even if the US raise rates twice more, South Korea has strong economic fundamentals such as ample foreign reserves and a current account surplus. Therefore, a serious capital outflow driven by foreign investors is unlikely."
The Governor of the Bank of Korea agreed one or two rates hike won't lead to capital outflow.
And the Vice Minister of Strategy and Finance said the Fed's decision will not have a long-term effect on the Korean economy.
Choi Si-young, Arirang News.
Following the U.S. Federal Reserve and European Central Bank's moves to tighten their monetary easing, Japan is leaving its fiscal policy unchanged.
The BOJ also plans to keep its key interest rate steady, and go ahead with quantitative easing as scheduled.
Choi Si-young has the full story.
The Bank of Japan said Friday that it will keep its key interest rate at minus zero-point-one-percent, the same it's been since January 2016.
It'll also continue its quantitative easing program... until the consumer price index rises by zero-point-two percent over the year before.
The central bank reiterated that it still sees the Japanese economy gradually growing.
In contrast, the U.S. decided this week to raise rates, and the European Central Bank said it would be winding up its quantitative easing.
"We will continue to make net purchases under the APP (asset purchase programme) at the current monthly pace of 30 billion euros until the end of September 2018."
ECB President Mario Draghi said the massive bond-buying program will be phased out by the end of this year.
It had started in 2015... to help the Eurozone recover from the debt crisis that began in 2009.
However, the bank is keeping its main interest rate at its current record low of zero-percent at least through the summer of 2019 to bring down inflation.
The U.S. announced the most aggressive fiscal policy, raising its key rate for the second time this year, and the seventh time since 2015.
This time, the Fed went a step further and retracted its earlier statement that it will keep rates low enough to stimulate the economy.
Fed Chairman Jerome Powell expressed confidence in the US economy, citing strong consumer spending and investment.
With the US and Europe pulling back on monetary easing, and Japan waiting to see how things go, emerging economies have seen their currencies weaken against the dollar due to rapid capital outflows. South Korea is also on alert.
"Despite the U.S. and ECB's moves to tighten monetary easing, South Korea has relatively ample foreign reserves, so there won't be huge financial instability. Even if the US raise rates twice more, South Korea has strong economic fundamentals such as ample foreign reserves and a current account surplus. Therefore, a serious capital outflow driven by foreign investors is unlikely."
The Governor of the Bank of Korea agreed one or two rates hike won't lead to capital outflow.
And the Vice Minister of Strategy and Finance said the Fed's decision will not have a long-term effect on the Korean economy.
Choi Si-young, Arirang News.