BoJ kept monetary policy unchanged as widely expected today. Under the yield curve control frame work, short-term policy interest rate is held at -0.10%. As for long-term interest rate, BoJ will continue to purchases JGBs, without upper limit, to maintain 10-year JGB yield at around 0%. The decision was made by 8-1 vote, with Goushi Kataoka dissented again, preferring to strength monetary easing.

In the accompany statement, BoJ said the “economy has picked up as a trend, although some weakness has been seen in part”. Exports and industrial production “have continued to increase as a trend, despite the remaining effects of supply-side constraints.”

Core inflation is “likely to increase clearly in positive territory for the time being due to a significant rise in energy prices, a pass-through of raw material cost increases, and dissipation of the effects of the reduction in mobile phone charges”.

BoJ also said, “there are extremely high uncertainties over how the situation surrounding Ukraine will affect Japan’s economic activity and prices, mainly through developments in global financial and capital markets, commodity prices, and overseas economies.”

Full statement here.

BoJ Governor Haruhiko Kuroda told the parliament today, “it will take more time to achieve our 2% inflation target in a stable manner, so it’s too early to debate specifics on how to exit from easy policy.”

Core consumer inflation in Japan is generally expected to climb up in the months ahead, with prospect of hitting the 2% target. But Kuroda talked down the significance of such development. “I don’t think Japan is in a condition where inflation stably hits 2%, even when the impact of cellphone fee cuts taper off and energy prices rise further,” he said.

Kuroda just reiterated that BoJ will consider stimulus exit when 2% inflation is achieved. And, “in doing so, we will guide monetary policy to ensure markets including those for Japanese government bonds remain stable.”