Markets react to Kuroda speech as Japanese rates are held down

JAPANESE interest rates remain at 0.1 per cent, as the Bank of Japan confirms the continuation of the country’s radical programme of monetary easing.

The Nikkei fell 1.5 per cent on the announcement yesterday, correcting slightly from a big rise on Monday.

The yen also rose against the dollar, continuing the volatility that has marred the currency for some time now.

Governor Haruhiko Kuroda spoke to the media after the decision was announced, saying that he wanted to avoid the gradual approach taken by previous administrations, in which monetary policy would change on a relatively regular basis to respond to particular events.

Kuroda added that as Japanese government bond yields had stabilised recently, the bank would not be implementing additional monetary tools.

Orders for machinery were down considerably on the year, but seem to finally be on an upward trajectory in the early months of this year, jumping by 14.2 per cent in March, following a 4.2 per cent rise in February.