Bank of Japan Maintain Policy Stimulus

Bank of Japan (BOJ) decided to maintain policy stimulus. This is done after seeing the latest economic data that shows the negative impact of the increase in sales tax. The increase in sales tax has indeed lasted some time and potential have a negative impact on the Japanese economy. BOJ board assesses the country still has to fight with efforts in pursuing an inflation target of 2%.

The central bank said it would increase the monetary base in value 60 trillion yen - 70 trillion yen or about US $ 571 billion-US $ 666 billion per year. This policy is in line with the consensus of 31 economists surveyed by Bloomberg News.

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The BOJ said that Japan's economy showed a recovery trend, however, the impact of the sales tax increase in last April, is still ongoing. Because of this, the BOJ decided to undertake stimulus measures that have been announced in Tokyo on Thursday 4 September 2014.

Based on the observation BOJ, there are some sectors that are still affected by the sales tax increase, primarily in private consumption and corporate sectors. In addition to the two main sectors, the investment property sector is also apparently affected. In July, industrial production even going weaker. This broke up the BOJ hopes that the economic recovery has been approached previously predicted momentum.

On the other hand, the BOJ still believes the ability to sustain growth projections. BOJ believes the economy will continue to recovery. This optimism is because BOJ sees the positive impact of the tight labor market that leading to higher wages.

While other opinion of some analysts, underscore the BOJ efforts in pursuit of the inflation target of 2%, is not worth showing results. This condition is a challenge for the Prime Minister of Japan, Shinzo Abe, who recently announced his cabinet reshuffle. Prime Minister of Japan expressed his new cabinet will focus tackle this Sakura's country chronic deflation.

While the BOJ expressed some elements are now weaker than expected economy. However, the BOJ can still expect growth to accelerate. BOJ could cut its forecast for growth if economic conditions showed a negative trend. But, as long as it has not been achieved, it looks like they will maintain stimulus policies.

The economic downturn has indeed become a major challenge for the BOJ. This is because the central bank buys government bonds in large amounts. In addition, the BOJ also bought some financial assets to help Abe revive the economy. This background forces the BOJ to work hard to pursue its economic growth target and attain it.