BoJ left monetary policy unchanged as widely expected. Under the yield curve control framework, short term interest rate is kept at -0.1%. BoJ will also continue to purchase JGBs, without upper limit, to keep 10-year JGB yield at around 0%. The decision was made by 8-1 vote as usual, with Goushi Kataoka dissented, pushing to strengthen monetary easing.
The central bank said the economic outlook is “likely to follow an improving trend through the materialization of pent-up demand and supported by accommodative financial conditions and the government’s economic measures”. But pace would be “only moderate while the impact of COVID-19 remains worldwide”. Annual CPI core is likely to be negative for the time being, but it’s expected to turn positive and increase gradually with economic improvement.
It also reiterated the “extremely high uncertainties” over the pandemic impacts. For the time being it will closely monitor the impact of COVID-19 and “will not hesitate to take additional easing measures if necessary.”
