Markets: News  

Bank of Japan holds policy moves before Greek vote

HONG KONG (MarketWatch) -- The Bank of Japan on Friday left its benchmark interest rate unchanged in a range between 0% and 0.1% and also didn't announce any fresh monetary stimulus, avoiding further policy action ahead of the weekend elections in Greece.

The decisions were unanimous at the policy-setting board of the central bank, and in line with market expectations.

The BOJ cited nervousness in the global financial markets, mainly over the European debt crisis, and that particular attention should be paid to these developments for the time being.

The yen turned volatile after the decision, rising immediately after the announcement before slipping back a little. The dollar (USDJPY) traded at ¥79.08, down from ¥79.33 overnight in New York.

In a note ahead of the decision, Bank of America Merrill Lynch analysts said any further easing from the Japanese central bank "will depend to a large extent on exchange rates."

They forecast the July 11-12 policy meeting as the earliest date for further easing, as "the time gap will allow the bank to review the outcome of the Greek election on June 17 and the [Federal Reserve's] meeting on June 19-20."

Possible easing moves included expanding asset purchases, cutting interest paid on excess reserves, adding to guidance on future policy or raising its informal inflation target of 1%, the analysts said.

Direct purchases of foreign-currency bonds were also possible but remained unlikely, the analysts said.