The Bank of Japan Leaves its Monetary Policy Steady in October

The Bank of Japan released today its decision about interest rates, where the Japanese monetary policy makers have decided to keep the rates unchanged in one of the government's efforts to give more supports for the economic recovery. 

Mr. Shirakawa, governor of the Bank of Japan and his board, left the benchmark interest rate to "virtually zero" a range of 0.0% to 0.10%, after the meeting of the bank, while this decision came compatible with anticipations which noted that. 

On the other hand, the leaders of BOJ decided to leave the amount of asset-purchase fund at 15 trillion yen along with keeping the credit-loan program unchanged at 35 trillion yen to encourage the banks lending. 

Moreover, the Bank of Japan noted that the economic recover bas returned to normal level and now is picking up amid the sluggish global economy, while the economy is facing a downward pressure as the European financial crisis beside the sluggish US economy. 

Japanese economy success to start the recovery phase this quarter as the industry sector continued to introduce more cheerful signs these days after manufacturers restored their production cycle after the massive quake that hit the nation during the first quarter of this year. 

Meanwhile, Japanese companies have restored their facilities that damaged by the March 11 quake, while Toyota Motor Co. is one of the world's biggest carmakers and it's the Japan's first largest automakers, reported that the domestic demand for vehicle sales has advanced by 1.7% in September, which is the first increase in 13 months. 

On the other hand, Japanese economy witnessed a first drop for its retail trade in three months as Japan's economy is in a critical phase these days amid the current events that threaten the global economic growth along with the yen's appreciation crisis that is a concern to major Japanese companies, adding that Japanese economic growth needs time and more stimuli to rebound. 

Further, the ECB leaders would reintroduce purchases of covered bonds and yearlong loans for banks to support markets rattled by the region’s sovereign-debt crisis and they announced that EU plans to coordinate recapitalization of European banks, reducing European debt crisis concern. 

On the contrary, Goldman Sachs Group Inc. cut its forecast for Japan’s growth to 2.1% from 2.5% in the fiscal year starting April 2012 and to 0.1% from 0.2% for this fiscal year, due to a slowdown in global expansion.