As was widely expected, the Bank of Japan has announced that it will keep interest rates at the current level of 0.1 percent. The vote was unanimous and according to a statement released by the bank, the low rate is necessary as “Japan’s economy faces the critical challenge of overcoming deflation and returning to a sustainable growth path with price stability”.
“The Bank of Japan has been under continuous pressure from the cabinet and the finance minister to combat deflation,” said David Cohen at Action Economics in Singapore.
“If the economic data continue to improve, then it will hope that this problem will go away. Its hope is that the economic recovery will remain on track.”