After the monetary policy meeting, Bank of Japan decided to adopt a negative interest rate of minus 0.1 percent with effect from 16 February. The move was out of the market's expectations. The central bank stated that there will be a further cut if necessary. The board was split 5-4 on the decision to set a negative interest rate. After the announcement, Japanese Yen declined and USD/JPY last stood at 121.15.
The central bank pledged to keep increasing the monetary base at an annual pace of 80 trillion yen, by continuing to purchase Japanese government bonds, exchange-traded funds and real estate investment trusts.
Meanwhile, the time frame for reaching its 2% inflation target was delayed again from the second half of FY2016 to FY2017.
(AAStocks Financial News)