The Bank of Japan said in its monetary policy meeting on Oct. 13 and 14 that it will encourage interest rates to remain at 0.1 percent and that all temporary measures put in place to sustain markets would be reviewed in accordance with conditions in the economy, minutes released on Thursday showed.
The bank announced on Oct. 30 that it would stop purchasing corporate debt from December, as it starts to pull back measures put in place to resuscitate the economy in the aftermath of the credit crisis that originated in the United States.
"Members agreed that, given the above assessment of economic activity and prices, it was appropriate to maintain the current guideline that the bank would encourage the uncollateralized overnight call rate to remain at around 0.1 percent," the minutes said. Japan has held interest rates at zero or near zero for most of the past decade.
The bank said that despite signals that the global economy was beginning to recover, "the pace and sustainability of economic recovery after the effects of the policy measures had abated remained highly uncertain."
On Japan, members were hesitant to say that a full recovery was in progress, noting the nation's dependence on exports. "The outlook (for Japan) continued to be attended by a significant level of uncertainty since it would be greatly dependent on the improvement in overseas economies," members of the meeting said.
One member of the meeting also noted that as measures to stimulate the purchases of certain goods were drawn back, consumption in Japan may decline.
"The weakness in private consumption might become more evident after the end of sales promotion measures by the government, partly because these measures had boosted front-loaded demand," the minutes said.
Japan has in place a number of measures to encourage spending on goods such as environmentally friendly automobiles, in order to keep the population spending even in difficult times.
Members also said that they wish to maintain cooperation with international consensus, and adjust policy in line with global developments.
(Xinhua News Agency November 5, 2009)