BoJ keeps monetary policy unchanged as widely expected, by unanimous vote. Under the yield curve control, short-term policy interest rate is held at -0.10%. 10-year JGB yield will be kept at around 0% with bond purchases without upper limit. 10-year JGB yield will continue to be allowed to fluctuate in range of around plus and minus 0.50% from 0% level.
The central bank maintained the pledge to continue with Quantitative and Qualitative Monetary Easing with Yield Curve Control for “as long as it is necessary” for meeting inflation target in a “stable manner”. It “will not hesitate to take additional easing measures if necessary”. BoJ will conduct a “broad-perspective review of monetary policy”, with a planned time frame of around 12 to 18 months.
In the new economic projections, while core inflation forecasts were upgraded, it’s not expected to sustain at the 2% level throughout the horizon.
- Real GDP forecasts (versus January estimates):
- Fiscal 2023 at 1.4% (down from 1.7%).
- Fiscal 2024 at 1.2% (up from 1.1%).
- Fiscal 2025 at 1.0% (new)
- CPI Core forecasts (versus January estimates):
- Fiscal 2023 at 1.8% (up from 1.6%).
- Fiscal 2024 at 2.0% (up from 1.8%).
- Fiscal 2025 at 1.6% (new).
- CPI Core-Core forecasts (versus January estimates):
- Fiscal 2023 at 2.5% (up from 1.8%).
- Fiscal 2024 at 1.7% (up from 1.6%).
- Fiscal 2025 at 1.8% (new).
