No surprise, BoJ left monetary policy unchanged today. Short term policy rate is kept at -0.1%. BoJ will continue to purchase assets at a pace of JPY 80T per annum to keep 10 year JGB yields at around 0%.
Goushi Kataoka dissented again, continued his push to lower yields on JGBs with maturities longer than 10 years.
Quotes from the statement:
- “Japan’s economy is expanding moderately, with a virtuous cycle from income to spending operating”.
- “Japan’s economy is likely to continue its moderate expansion”.
- “Year-on-year rate of change in the CPI is likely to continue on an uptrend and increase toward 2percent”.
- Risks include: US policies, Brexit and geopolitical risks
- BoJ will “continuing expanding the monetary base:” until core CPI exceeds 2% and stays above in a “stable manner.
Little reaction in USD/JPY as it’s on course to extend the rebound from 105.24, following broad based dollar strength.
