The Bank of Japan (BOJ) would most likely hold on to its present monetary policy as the Japanese economy shows signs of improvement. Sources familiar with BOJ plans told Reuters that majority of the board members believe that the economy is well on its way to recovery, even if some still want more data to gauge how strong business investment in this economy really is.The bank's quantitative easing and government stimulus initiatives are now seeing results, prompting sources to speculate that the BOJ will stay on its current path. Reuters reported that for the first time in more than a year, core consumer prices have risen and summer bonuses saw an increase for the first time in three years. The unemployment rate also fell for the first time in 4 ½ years.
The BOJ will hold a two-day review this week. Reuters said that the BOJ is expected to keep their promise of increasing its annual cash and deposits to the tune of JPY 60 trillion to 70 trillion, or USD 600 billion to 700 billion each year.
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