- BoJ minutes
During this month's meeting the Bank of Japan was expected to make any hints on their future moves, as the world's third largest economy will have to face a significant reduction in domestic demand amid April's sales tax hike. Therefore, a decision to expand its already unprecedented stimulus programme was expected. Nevertheless, the central bank maintained the pace of its annual stimulus at 60-70 trillion yen, and doubled the amount of its loan programmes, which were designed to boost demand for credit by Japanese companies and households. Under both facilities, Japanese banks will be able to borrow funds at 0.1% per year for 4 years, instead of 1-3 years set earlier.
Amid improved lending conditions, some of the BoJ members have already expressed their concerns the central bank can enhance lending facilities in terms of the amount and duration of credit, in attempt to significantly stimulate domestic demand for credit. At the same time, many economists believe Kuroda will announce fresh stimulus later this year, as he aims to bring inflation to 2% by early 2015, while price growth is already starting to slow down. According to Capital Economics, October will be the most appropriate time for the announcement, when Kuroda will be reporting the semi-annual outlook. Another fact that speaks in favour of additional easing is a downwardly revised exports outlook.
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