IMF Deputy Dan Katz Visits China as Key Economic Review Nears 
BOJ Faces Pressure for Clarity, but Neutral Rate Estimates Likely to Stay Vague 
Asian Markets Stabilize as Wall Street Rebounds and Rate Concerns Ease 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
Australia’s Economic Growth Slows in Q3 Despite Strong Investment Activity 
China’s Services Sector Posts Slowest Growth in Five Months as Demand Softens 
China Urged to Prioritize Economy Over Territorial Ambitions, Says Taiwan’s President Lai 
At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan (BoJ) decided to keep its short-term policy interest rate at minus 0.10 percent, while purchasing Japanese government bonds (JGBs) so that 10-year JGB yields remain at around zero percent mark.
With regard to the amount of JGBs to be purchased, the Bank will conduct purchases at more or less the current pace -- an annual pace of increase in the amount outstanding of its JGB holdings of about 80 trillion yen -- aiming to achieve the target level of the long-term interest rate specified by the guideline.
Moreover, the Bank will purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at annual paces of about 6 trillion yen and about 90 billion yen, respectively. Additionally, As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen, respectively.
The BoJ in its quarterly economic outlook report mentioned that the Japan's economy is likely to continue growing at a pace above its potential through the projection period -- that is, through fiscal 2018 -- on the back of highly accommodative financial conditions and the effects of the government's large-scale stimulus measures, with the growth rates in overseas economies increasing moderately. The central bank revised up its estimate on Japan Real GDP to +1.5 percent for FY2017/18 vs +1.3 percent projected in November, for FY2018/19 at +1.1 percent vs +0.9 percent projected in November.
In addition, the year-on-year rate of change in the consumer price index (CPI, all items less fresh food) is likely to increase from about 0 percent and become slightly positive, reflecting developments in energy prices. Thereafter, it is expected to increase toward 2 percent as the aggregate supply and demand balance (the output gap) improves and medium- to long-term inflation expectations rise. The central bank kept the core CPI forecast at +1.5 percent for FY2017/18 vs +1.5 pct projected in November, for FY2018-19 at +1.7 percent vs +1.7 pct projected in November ( Likely to see inflation reach 2 pct around fiscal 2018).
