BoJ left monetary policy unchanged today as widely expected. Under the yield curve control framework, short term policy rate is held at -0.1%. BoJ will also continue target to keep 10 year JGB yield at around 0%. Annual pace of JGB purchase is kept at around JPY 80T. Goushi Kataoka dissented again in a 8-1 vote. Kataoka pushed to “further strengthen monetary easing” so that “yields on JGBs with maturities of 10 years and longer would broadly be lowered further.”

The description on the economy is largely unchanged. One exception is that CPI is now “in the range of 0.5-1.0%”, comparing to April’s description of moving around 1 percent. On the outlook, BoJ noted that the economy is “likely to continue its moderate expansion.” Domestic demand will follow an uptrend while exports will continue the moderate increasing trend. Risks to the outlook include the following: the U.S. economic policies and their impact on global financial markets; developments in emerging and commodity-exporting economies; negotiations on the United Kingdom’s exit from the European Union (EU) and their effects; and geopolitical risks.

Full statement here.

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