Bank of Japan: Japan is Moderately Recovering

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Japan GovernmentThe Japanese government stated that the economy is amid a moderate recovering this month, however, pointed at the persistent weakness of Japan's export sector.

Bank of Japan's Governor Haruhiko Kuroda said at a news conference right after announcing the Bank's monetary policy stance that the exports, manufacture, and output sectors are weakening, despite having a solid consumption and capital expenditure.

“Exports, output and manufacturers’ sentiment are weakening. But consumption and capital expenditure are fairly strong," he said, highlighting a solid domestic demand.

He also highlighted that he doesn't foresee a worse economic situation.

"I don’t think Japan’s economic outlook is worsening sharply, or that the economy is about to lose momentum for hitting our price goal,” he added.

Kuroda added that they didn't change their expectations about overseas growth, as risks are increasing.

“We’re yet to see signs of a pickup in overseas growth, " he said, "We’re not changing our baseline scenario on the overseas economy. But risks surrounding overseas growth are heightening,” he added.

Investors and analysts are concerned about the future of the Japanese economy, as its facing external pressures, especially from the United States with which they've reached a deal recently. Japan is also expected to raise the sales tax from 8% to 10% next month, in order to alleviate their fiscal problems.

The Bank kept the interest rates steady

Right before the conference, the Bank announced its decision to leave the interest rates, however signaling that they may examine the economic situation and the price levels more closely when they meet again, in October.

"The BOJ judges that it is becoming necessary to pay closer attention to the possibility that the momentum towards achieving its price target will be lost," stated the central bank, adding that the institution would reexamine the economic and price developments at their next meeting.

The rate was kept at -0.1 percent, calling for keeping very low-interest rates till around spring 2020.

By 9:57 GMT the USD/JPY pair was at 108.00, losing 0.40 percent. The GBP/JPY was at 134.75, falling 0.33 percent while the EUR/JPY went down by 0.08 percent, at 119.51.

Ibeth Rivero joined the DailyForex team shortly after finishing her BA in economics at the Universidad del Norte in Barranquilla, Colombia. Ibeth contributes daily market commentary in both English and Spanish and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.