Bank of Japan Governor Kazuo Ueda speaks while gesturing during a press conference after the monetary policy meeting held at the Bank of Japan headquarters in Tokyo on July 28, 2023.
Stra | AFP | Getty Images
The Bank of Japan is expected to maintain ultra-accommodative monetary policy at its first meeting of the year, while lowering its core inflation forecast for next year.
The Bank of Japan unanimously decided to keep interest rates unchanged at -0.1%, adhering to its yield curve control policy of keeping the 10-year government bond yield at 1%, the upper limit. policy statement He was released on Tuesday after two days of meetings.
The yield on 10-year government bonds gradually declined, and the Japanese yen rose 0.1% against the dollar to 148 yen. The Nikkei 225 Stock Average briefly hit a 33-year high before tapering its rise.
All economists polled by Reuters expect Japan’s central bank to maintain its negative interest rate policy this month, making it the only central bank in the world to do so. Governor Kazuo Ueda is scheduled to explain the decision at an afternoon press conference.
The market consensus is that the Bank of Japan will abolish the negative interest rate system at its April meeting at the earliest, as soon as it confirms a trend toward significant wage increases in spring wage negotiations.
Japan’s central bank believes this trend will encourage consumer spending and lead to more sustainable and stable inflation driven by domestic demand.
among them Quarterly outlook for the Japanese economyMembers of the Bank of Japan’s board of directors have increased their median forecast for the growth rate of core consumer prices (defined as inflation excluding food prices) from April to 2024 to 2.4% from the 2.8% expected in October. I pulled it down.
The central bank also slightly raised its core CPI inflation forecast for fiscal 2025 to 1.8% from the previous forecast of 1.7%. The Bank of Japan stuck to its previous median forecast for so-called core-to-core inflation, which subtracts food and energy prices from inflation.
Japan’s core CPI slowed to 2.3% in December, reducing pressure on the Bank of Japan to normalize policy, although it has now exceeded the Bank of Japan’s 2% target for 21 straight months, the print said.
This is a developing story. Check back for more updates.
