BoJ decided to maintain its monetary policy unchanged, a move that has come as a disappointment to some observers who anticipated minor policy changes or at least some alterations in the statement.
Under the Yield Curve Control framework, short-term policy interest rate remains at -0.1%. BoJ has also maintains its target for the 10-year JGB yield at approximately 0%, allowing for a cap of 1% for yield fluctuations. This decision was reached unanimously.
In addition, BoJ reiterated its commitment to an easing bias, stating it “will not hesitate to take additional easing measures if necessary.”
Regarding Japan’s economic outlook, BoJ expects a moderate ongoing recovery in the near term. However, it acknowledges downward pressures, primarily due to a slowdown in the recovery pace of overseas economies.
Looking ahead, the central bank projects that as a positive cycle from income to spending strengthens, Japan’s economy will continue to grow at a rate above its potential growth rate.
In terms of inflation, BoJ anticipates CPI core to remain above 2% through fiscal 2024. Underlying inflation is expected to “increase gradually toward achieving the price stability target.”
