Bank of Japan Keeps Key Interest Rate Unchanged As It Awaits Govt Nomination for Next Chief.
The Bank of Japan kept its key interest rate unchanged Friday at the end of a two-day policy board meeting in an unanimous decision that had been widely expected.
The Bank of Japan said in a statement that the overnight call rate will stay at 0.5 percent. Less certain is what will happen when the government faces a divided Parliament when it proposes its pick for Bank of Japan chief. The opposition had been boycotting the legislative sessions and threatening they may block the nomination.
Speculation has been growing for weeks that the ruling party wants Deputy Bank of Japan Gov. Toshiro Muto as the central bank head. Fears have also been growing that a political standoff could delay his confirmation. "We are raising questions about the acceptability of proposing Mr. Muto while knowing full well we have voiced some reservations," Democratic lawmaker Kenji Yamaoka said on nationally televised news.
Failure to have a head for the central bank of the world's second largest economy will be a major international embarrassment for Japan. But Prime Minister Yasuo Fukuda, whose popularity ratings have been dwindling, has been largely powerless to placate the political jockeying from the opposition.
Japan Foreign Reserves Surpass $1 Trillion
Japan's foreign reserves surpassed $1 trillion for the first time in February, the government said Friday, fueled by a stronger euro and gains in the value of U.S. Treasurys. Reserves of convertible foreign currencies, gold and International Monetary Fund special drawing rights rose $11.94 billion from January to $1.01 trillion, the Ministry of Finance said.
February's result marked the ninth straight month of increases and followed a $22.68 billion gain in January. China is the only other country with foreign currency reserves of more than $1 trillion. The strengthening of the euro against the dollar to $1.5179 at the end of February from $1.4861 at the end of January was one of the main reasons for the increase.
The value of Japan's euro-denominated bonds rises as the European currency climbs against its U.S. counterpart because Japan calculates the value of its reserves in dollars. Another contributor to February's gain was a drop in U.S. Treasury yields, which move inversely to prices and in which Japan invests the bulk of its reserves. The 10-year Treasury yield was 3.513 percent at the end of February, down from 3.597 percent at the end of January. Higher gold prices also helped boost the country's foreign reserves in February.
The Bank of Japan kept its key interest rate unchanged Friday at the end of a two-day policy board meeting in an unanimous decision that had been widely expected.
The Bank of Japan said in a statement that the overnight call rate will stay at 0.5 percent. Less certain is what will happen when the government faces a divided Parliament when it proposes its pick for Bank of Japan chief. The opposition had been boycotting the legislative sessions and threatening they may block the nomination.
Speculation has been growing for weeks that the ruling party wants Deputy Bank of Japan Gov. Toshiro Muto as the central bank head. Fears have also been growing that a political standoff could delay his confirmation. "We are raising questions about the acceptability of proposing Mr. Muto while knowing full well we have voiced some reservations," Democratic lawmaker Kenji Yamaoka said on nationally televised news.
Failure to have a head for the central bank of the world's second largest economy will be a major international embarrassment for Japan. But Prime Minister Yasuo Fukuda, whose popularity ratings have been dwindling, has been largely powerless to placate the political jockeying from the opposition.
Japan Foreign Reserves Surpass $1 Trillion
Japan's foreign reserves surpassed $1 trillion for the first time in February, the government said Friday, fueled by a stronger euro and gains in the value of U.S. Treasurys. Reserves of convertible foreign currencies, gold and International Monetary Fund special drawing rights rose $11.94 billion from January to $1.01 trillion, the Ministry of Finance said.
February's result marked the ninth straight month of increases and followed a $22.68 billion gain in January. China is the only other country with foreign currency reserves of more than $1 trillion. The strengthening of the euro against the dollar to $1.5179 at the end of February from $1.4861 at the end of January was one of the main reasons for the increase.
The value of Japan's euro-denominated bonds rises as the European currency climbs against its U.S. counterpart because Japan calculates the value of its reserves in dollars. Another contributor to February's gain was a drop in U.S. Treasury yields, which move inversely to prices and in which Japan invests the bulk of its reserves. The 10-year Treasury yield was 3.513 percent at the end of February, down from 3.597 percent at the end of January. Higher gold prices also helped boost the country's foreign reserves in February.
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