Just across the wires, Governor Kuroda surprised the global markets and upset the Japanese government by holding the line on rates and policy. The bank
Just across the wires, Governor Kuroda surprised the global markets and upset the Japanese government by holding the line on rates and policy. The bank did expand its asset buying facilities by adding additional items to its list of approved assets it will be buying but otherwise made no change.
Details will be released shortly as the Bank’s press conference. CNBC reported that Reuters said that Ahead of the decision, Reuters had said the central bank was considering specific steps for expanding stimulus, which further bolstered the market’s elevated expectations for stimulus.
In anticipation, the Ministry of Finance had even prepared a statement saying it welcomed the action and would all deploy necessary policy steps, including fiscal support, according to the Reuters report.
Indeed, Abe’s promise of a hefty fiscal stimulus package on Wednesday had placed mounting pressure on the central bank to come up with matching monetary ammunition.
The 28 trillion yen ($265 billion) fiscal injection, estimated at 6 percent of Japan’s economy, surprised markets on Wednesday as many anticipated a fiscal package only sometime next week.
The Japanese yen surged over 200 points on the news and is trading at 103 against the US dollar, which will likely upset the economic situation worse.
This mornings data releases also showed a drop in retail sales, industrial production and lower inflation.