Governor Haruhiko Kuroda and his board kept the target for increasing the monetary base unchanged, and left their benchmark rate at minus 0.1 percent, as forecast by 35 of 40 economists surveyed by Bloomberg. The central bank said it will add easing if necessary while the language in its statement Tuesday indicates a downgrade in its assessment of the economy.
With the BOJ far from its 2 percent inflation goal and growth stalling, most analysts have seen additional stimulus as just a matter of time. The stakes are rising for Kuroda, with household and corporate sentiment waning and investors questioning whether monetary policy is reaching its limits.
“You can see from the statement the agony for the BOJ in the gap between their hopes and the realities in the economy and prices,” said Kyohei Morita, an economist at Barclays Plc. “Japanese inflation is at a level where even the BOJ has to admit its weakness. It is leaning toward additional stimulus and I expect it to be in July.”
A Chinese consortium plans to restart work on a $1.4 billion port city project in Colombo after Sri Lanka unblocked the project, a sign of thawing ties weeks before Prime Minister Ranil Wickremesinghe travels to Beijing.
President Maithripala Sirisena had suspended the project a year ago, shortly after he took office following a campaign in which he questioned China’s role in Sri Lanka. CHEC Port City Colombo (Pvt) Ltd. on Tuesday welcomed the “positive step" and “mutually beneficial solution."
