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Saturday 21st of November 2009
September 17, 2009    

BoJ keeps interest rates on hold

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by Kay Murchie

The Bank of Japan (BOJ) has elected to keep interest rates on hold at 0.1% and said it’s possible that a stronger yen will support the economy in the long-term.

Since June, the yen has climbed 6.7% against the dollar.

Following the two day policy meeting, the central bank also upgraded its assessment of the economy with renewed optimism.

The economy, which is the world’s second largest, recently emerged from recession after the economy grew by 0.9% in the second quarter, following four consecutive quarters of contraction.

BoJ Governor, Masaaki Shirakawa, said: “To give our general view on the yen, the short-term impact of a stronger yen would be to lower prices,”

“It is possible for a stronger yen to support the economy in the long run, the Governor added”

However, the Bank said it remains cautious but that the downside risks for the economy were lessening.

In related news, it was recently reported that Japan’s unemployment rate reached a record high of 5.7% in July.

Meanwhile the Ministry of Finance recently reported that Japanese exports fell 36.5% in July on an annual basis and followed the 35.7% fall posted in June.

On a seasonally adjusted basis, exports fell 1.3% in July compared with the previous month.

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