The Bank of Japan (BoJ) did not change its monetary policy on Friday, but renewed its guidance on the future policy path and decided to take a “broad perspective” review of monetary policy.
In the statement made after the meeting, it was emphasized that a period of 1-1.5 years would be spent for the review.
The BOJ kept its short-term interest rate target at 0.1 percent and its target for 10-year bond yields around 0 percent, as expected, at its two-day meeting that ended on Friday.
However, it changed its forward guidance by removing reference to the need to hedge against risks from the COVID-19 outbreak and to keep interest rates “at current or lower levels”.
Growth expectations raised
The Bank of Japan (BoJ), while raising its growth expectations, revised down its expectations for core inflation, which it monitors closely.
According to the BOJ’s statement, the core consumer price expectation for the 2023 fiscal year was reduced from 1.6 percent to 1.4 percent, and from 1.8 percent to 1.2 percent for the 2024 fiscal year. The bank announced its expectation for the 2025 fiscal year as 1.0 percent.