BoJ left monetary policy unchanged. Under the yield curve control, short-term policy interest rate is held unchanged at -0.1%. BoJ will also buy a “necessary amount” of JGB bonds to keep 10-year yield at around 0%.
BoJ maintained the pledge to continue with QQE with yield curve control, “aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner”. It will also continue expanding the monetary base “until the year-on-year rate of increase in the observed consumer price index (CPI, all items less fresh food) exceeds 2 percent and stays above the target in a stable manner.”
In the new economic projections, comparing to October forecasts:
- Fiscal 2021 real GDP growth downgraded from 3.4% to 2.8%.
- Fiscal 2022 real GDP growth upgraded from 2.9% to 3.8%
- Fiscal 2023 real GDP growth downgraded from 1.3% to 1.1%.
- Fiscal 2021 core CPI unchanged at 0.0%.
- Fiscal 2022 core CPI upgraded from 0.9% to 1.1%.
- Fiscal 2023 core CPI upgraded from 1.0% to 1.1%.
