TOKYO, July 30 (Xinhua) -- The Bank of Japan (BOJ) on Tuesday opted to maintain its ultra-low interest rates to support the economy amid an uncertain global outlook ahead of a planned consumption tax hike from 8 percent to 10 percent in October, as inflation remains well below the bank's 2 percent target.
The central bank's policy board at the conclusion of a two-day meeting, also decided that the continuation of a short-term policy rate of minus 0.1 percent would be kept as is, and long-term yields maintained at close to zero percent.
The central bank also voted to continue to increase its holdings of government bonds at an annual pace of around 80 trillion yen (735.75 billion U.S. dollars) with the board also deciding to leave unchanged its purchases of exchange-traded funds (ETF's) and other assets.
At the conclusion of the two-day policy setting meeting however, the BOJ did downgrade its forecast for inflation and its growth projection for upcoming years.
The downgrades may be an indication that along with other major central banks such as the United States Federal Reserve and the European Central Bank, the BOJ may be gearing up in the coming months to launch additional easing measures to support growth amid domestic and global economic headwinds.
These headwinds are in the form of international trade issues and uncertain global outlook, as well as a looming consumption tax hike here in October from 8 percent to 10 percent that will see domestic demand and business spending wane, with possible recessionary results, as has been the case with previous tax hikes here.