Bank of Japan: Same Ol, Same Ol

September 22, 2021

The Bank of Japan Board wrapped up its two-day policy review and decided by an 8-1 vote not to change its settings with Kataoka once again dissenting in favor of greater stimulus. The current policy framework anchored around a -0.1% short-term interest rate target, considerable quantitative stimulus, and a 10-year JGB yield objective of “around zero percent” was initially launched five years ago this month. No policy change had been anticipated, particularly in light of the planned Liberal Democratic Party leadership vote on September 29th that will determine the successor to Prime Minister Suga. The BOJ Board after deliberating for four hours 23 minutes over two days kept the same essential economic assessment that sees continuing severe conditions n “due to the impact of the novel coronavirus (COVID-19) at home and abroad” but retains confidence in gradual recovery “with the impact of COVID-19 waning gradually, mainly due to progress with vaccinations, and supported by an increase in external demand, accommodative financial conditions, and the government’s economic measures.” Once continuing disappointment is the stagnant performance of personal consumption. There is an outstanding promise to augment easing if necessary should the expected improvement not materialize. Inflation is hovering near zero percent but projected to climb closer to target in line with strengthening demand.

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

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