Bank of Japan Policy Left Unchanged

January 21, 2021

The Bank of Japan‘s policy board chose to retain interest rates of -0.1% on overnight money and “around zero percent” on the 10-year JGB yield. The policy of Quantitative and Qualitative Easing with Yield Control will be maintained for as long as needed to achieve the elusive goal of sustainable 2.0% core CPI inflation, and officials expected to period above that level to be attained before they will be confident enough to exit the strategy. Quantitative settings were not changed either, but as before the Board recommits to being prepared to augment easing if that is needed. Today’s policy statement was accompanied by updated forecasts and the quarterly Outlook for Economic Activity and Prices. GDP is now projected to sink 5.6% this fiscal year before recovering 3.9% in fiscal 2021 and 1.8% in fiscal 2022. Inflation doesn’t even reach 1% by fiscal 2022.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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