ABC Money
Home

Japan interest rates unchanged


Published :
Tue, 26 Jan 2010 12:15
By : financemarkets.co.uk
Print this Story


AddThis Social Bookmark Button


”Japan

The Bank of Japan has again elected to keep interest rates on hold at the low level of 0.1%, as widely expected.


It is anticipated that the Bank will leave rates at the low rate until around 2012 as a result of deflationary pressures.


The world’s no.2 economy exited recession in the second quarter of 2009 but there have been fears that the return of deflation could stall growth within the economy.


A short period of deflation (where prices fall rather than increase) could be a serious threat to the economy because it deters consumers and businesses from spending in expectation of falling prices.


Deflation was a problem for Japan during its so-called “Lost Decade” in the 1990s in which the economy struggled with falling prices.


Meanwhile, the Bank of Japan policy board voted unanimously to retain interest rates at the low level and in a statement, it said: “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 added: “The bank recognises that it is a critical challenge for Japan’s economy to overcome deflation and return to a sustainable growth path with price stability.”


The board added it expected Japan’s economy to contract by 2.5% for the current financial year, while growth of 1.3% for the 2010-2011 financial year has been estimated.


Meanwhile, not only is the economy battling to overcome deflation, there have been concerns about a strong yen.


While a strong yen is good news for the economy, it makes Japanese exports less competitive - but means imports are more affordable to Japanese consumers. Exports are a key to the economy‘s recovery.


In November, the yen reached a 14-year high against the US dollar and, at the time, there was speculation that the Government would take action.


However, Japan has not intervened on foreign exchange markets in six years, allowing the yen to find its own level.






Share on



Comment on this Article
Comment:
Title:
Name:
Please Enter
 
Here
  

 Search News

 Look For
Business
Credit cards
Finance
Loans
Money
Mortgages

 
 Stock Quotes *
SYMBOL
LAST
CHANGE
DOW JONES
10340.69
-107.24 ( -1.03 %)
NASDAQ
2792.28
22.57 ( 0.81 %)
FTSE 100
5741.15
38.78 ( 0.68 %)

SYMBOL ( 2012-01-19 )
LAST
CHANGE
STANDARD CHARTERED ( 11:35am )
1559.00
70.00 ( 4.76 %)
WOLSELEY PLC ( 11:35am )
2250.00
70.00 ( 3.20 %)
CARNIVAL ( 11:35am )
2017.00
46.00 ( 2.42 %)
LAND SECURITIES GROUP ( 11:35am )
679.50
36.50 ( 5.63 %)
WHITBREAD ( 11:35am )
1662.99
33.99 ( 2.09 %)

SYMBOL ( 2012-01-19 )
LAST
CHANGE
3M COMPANY ( 12:34pm )
85.78
0.71 ( 0.83 %)
BOEING CO ( 12:34pm )
75.70
0.64 ( 0.85 %)
JP MORGAN CHASE CO ( 12:34pm )
37.03
0.49 ( 1.33 %)
WAL MART STORES ( 12:34pm )
60.44
0.43 ( 0.72 %)
IBM ( 12:34pm )
181.50
0.43 ( 0.24 %)

SYMBOL ( 2012-01-19 )
LAST
CHANGE
F5 NETWORKS INC ( 12:11pm )
122.38
13.92 ( 11.80 %)
ICO GLOBAL COMM CL A ( 8:01pm )
99999999.99
9.37 ( 366.02 %)
PRICELINECOM INC ( 12:23pm )
525.40
6.57 ( 1.26 %)
AMAZONCOM INC ( 12:04pm )
195.65
6.21 ( 3.25 %)
MILLICOM INTERNATIONAL CELLULAR SA ( 4:00pm )
110.18
4.82 ( 4.43 %)

Gainers & Losers
Dow Jones
Euro Stoxx 50
FTSE 100
FTSE 250
FTSE AIM
FTSE ALL
Nasdaq

 Portfolio Manager

You must log in to access this area of the site. If you are not a registered user click here to sign up for instant access!


 Finance Explained

Money making ideas

Save money

Money management
Savings accounts
Investing money
Share dealing
Stock broker
Forex currency trading
Pension plans
Functions of Money

(c) 2007 viploan.co.uk, All Rights Reserved
*viploan.co.uk does not guarantee the accuracy of any share prices or stock quotations displayed. These are not real time quotes; all are delayed by at least twenty minutes and are for information purposes only.