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The Bank of Japan kept its monetary policy unchanged at its February meeting held yesterday. While the decision was broadly expected, the market was somewhat taken back by the dovish shift in the BOJ’s commentary.
In the statement issued alongside the monetary policy decision, the BOJ noted that it is now far more pessimistic about the domestic economic recovery and the health of the global economy.
Global Slowdown Weighing on Exports
The bank has previously expressed its view that strong exports and factory output will keep growth momentum in place. However, it tempered this view this time around in light of recent global growth concerns.
The BOJ has now reduced its assessment on foreign economies in light of the slowdown and heightened political uncertainty in Europe. The bank stated that “exports and production have been affected by the slowdown in overseas economies.”
However, the BOJ chief...
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