(Reuters) – The Bank of Japan ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday, making a historic shift away from a focus of reflating growth with decades of massive monetary stimulus.
The shift makes Japan the last central bank to exit negative rates and ends an era in which policymakers around the world sought to prop up growth through cheap money and unconventional monetary tools.
Following are excerpts from BOJ Governor Kazuo Ueda’s comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters:
IMPACT OF CENTRAL BANK’S DECISION
“Today’s decision will only lead to a 0.1% increase in short-term interest rates. We will also increase bond buying nimbly if there is a sharp rise in long-term rates. I don’t think deposits or lending rates will rise sharply from today’s decision.” SHORT-TERM RATES IN LINE WITH ECONOMIC AND PRICE OUTLOOK
“We reverted to a normal monetary policy targeting short-term interest rates, as with other central banks. We will choose the appropriate level of short-term rates in line with our economic and price outlook. But in doing so, we need to be mindful that there is some distance for inflation expectations to reach 2%. When we focus on this gap, it’s necessary to maintain accommodative monetary conditions even under a normal monetary policy framework.”
(Reporting by Leika Kihara; Editing by Sherry Jacob-Phillips)
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