BOJ doubles down on stimulus, sends yen skidding

STORY: The Bank of Japan is doubling down on its commitment to massive monetary stimulus.

On Thursday (April 28) the bank pledged to keep interest rates ultra-low and keep buying bonds in unlimited quantities.

That puts it odds with the U.S. Federal Reserve and others, which are shifting to a tighter monetary stance.

Governor Haruhiko Kuroda spoke at a news conference:

"Right now if things move as expected, I don't think we'll see a stage where we can seek an exit from our easy monetary policy. In this sense, it is necessary to continue easing the monetary policy.”

The Bank of Japan does see inflation pressure mounting.

It expects consumer price increases to hit 1.9% this year, before easing back in 2023.

But its commitment to low rates again sent the yen skidding lower.

It’s now at around two-decade lows versus the dollar.

That makes imports more expensive, fuelling inflation, but could help Japan’s exporters:

"Under the current situation, we haven't changed our view that a weak yen is positive overall. But it is also necessary to consider that excessive currency volatility which heightens uncertainty would have a negative effect.”

Japan’s finance ministry sounds more concerned, with an official saying the sharp yen moves were “extremely worrying”.

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