The Governor Haruhiko Kuroda.
The Japanese central bank took on Friday unexpectedly decided to cut the key interest rate to 0.1 percent, from the previous level of 0.1 percent. It reports Dow Jones Newswires.
The central bank says in a statement that the measure intends to prevent nedsiderisker and maintain momentum for achieving the inflation target of 2 percent. Uncertainty over the Chinese economy and the continued fall in oil prices given the risks to the inflation outlook.
“We will cut interest rates further if deemed necessary”, said the central bank.
The central bank also lowered forecast Core-CPI +0.8 percent for the next fiscal year starting in April, from the previous +1.4 percent, and pushed up the forecast for the inflation target be reached on the first half of fiscal year 2017.
The decision was taken by a vote of 5-4 in favor of the first to introduce negative interest rates in Japan. Bond purchasing program was submitted at the same time unchanged, by a vote of 8-1, like the previous meeting.
The central bank has kept monetary policy unchanged since October 2014, after the bond purchasing program was introduced in April 2013.
The Japanese Central Bank President Haruhiko Kuroda said as recently as a week ago that he was considering lowering the key interest rate to negative.
Of the 42 surveyed economists in the Bloomberg survey, no one thought that the central bank would lower the federal funds rate today. Only six judged that the bond purchase program would be expanded.
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