BoJ left monetary policy unchanged today as widely expected. Under the yield curve control frame work, short-term policy rate is held at -0.10%. BoJ will also will continue to purchase JGBs, without setting upper limit, to keep 10-year yield at around 0%. It will continue to offer to purchase 10-year JGBs at 0.25% yield every business day through fixed rate operations. Goushi Kataoka dissented again, pushing for further strengthening monetary easing.
In the new economic projections, BoJ downgraded fiscal 2022 GDP forecasts, but upgraded both fiscal 2023 and 2024. CPI forecasts was upgraded across the horizon. Here are the new projections.
- Fiscal 2022 GDP growth at 2.4% (downgraded from April’s 2.9%).
- Fiscal 2023 GDP growth at 2.0% (up from 1.9%).
- Fiscal 2024 GDP growth at 1.3% (up from 1.1%).
- Fiscal 2022 CPI at 2.3% (up from 1.9%).
- Fiscal 2023 CPI at 1.4% (up from 1.1%).
- Fiscal 2024 CPI at 1.3% (up from 1.1%).
- Fiscal 2022 CPI core-core (ex-fresh food and energy) at 1.3% (up from 0.9%).
- Fiscal 2023 CPI core-core at 1.4% (up from 1.2%).
- Fiscal 2024 CPI core core at 1.5% (unchanged).