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Headquarters of the Japanese central bank in Tokyo
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KAZUHIRO NOGI/ AFP
Japan's central bank continues to buck the global tightening trend, keeping the reins extremely loose despite rising inflation and the yen's sharp slide.
The Bank of Japan (BoJ) decided on Thursday to leave its main monetary policy levers unchanged after a two-day meeting.
Short-term interest rates are to remain at minus 0.1 percent and long-term rates at around zero.
The decision had been expected in market circles.
The Japanese central bankers are thus continuing to pursue a course that is in contrast to that of their colleagues in Europe and the USA.
Although prices are also rising in Japan, inflation is mainly driven by high energy prices and is also significantly lower than in the West.
The BoJ is expecting a price increase of 2.3 percent for the fiscal year running until March 2023.
So far, the central bankers had assumed 1.9 percent.
The country's biggest problem is not inflation
According to some economists, Japanese consumers tend to limit their consumption when prices rise.
This could limit inflationary pressures, which is why the BoJ is in no hurry to adjust its monetary policy.
Central bank governor Haruhiko Kuroda recently indicated that, despite the weakness of the yen, there should be no tightening of the reins for the time being.
Japan is struggling with an economic weakness that has persisted for several decades.
Low key interest rates are considered a suitable means of promoting growth, partly because companies can then obtain loans for their investments more easily.
Conversely, raising the key interest rate is seen as an instrument to counter rising inflation rates.
One problem: the resulting higher financing costs can also result in lower economic growth.
beb/dpa