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BoJ stands pat, upgrades inflation forecasts

BoJ kept monetary policy unchanged today. Under yield curve control framework, short term interest rate is held at -0.1%. 10-year JGB yield target is kept at around 0%, without upper limit on JGB purchases. The decision was made by 8-1 vote, with Goushi Kataoka dissented again, pushing for further strengthening of monetary easy, by lowering short and long term interest rates. BoJ will will also continue to buy ETFs and J-REITS with upper limit of JPY 12T and JPY 180B respectively.

In the new economic forecasts, BoJ:

  • Downgraded fiscal 2021 GDP growth to 3.8% (from April’s 4.0%)
  • Upgraded fiscal 2022 GDP growth to 2.7% (from 2.4%).
  • Kept fiscal 2023 GDP growth at 1.3% (unchanged).
  • Upgraded fiscal 2021 CPI core to 0.6% (from 0.1%).
  • Upgraded fiscal 2022 CPI core to 0.9% (from 0.8%).
  • Kept fiscal 2023 CPI core at 1.0% (unchanged).

Full statement here.

Full economic projections here.

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