Bank of Japan Policy Unchanged
October 28, 2021
The Bank of Japan retained targets of -0.1% on its short-term policy interest rate and “around zero percent” for the 10-year JGB bond yield, according to today’s statement. In the 8-1 decision, Kataoka again favored a more expansionary stance. Today’s meeting coincided with publication of the quarterly Outlook for Economic Activity and Prices in which projected core CPI inflation in the fiscal year ending March 2022 was revised downward by 0.6 percentage points to zero percent, and such is expected to climb only to 1.0% two years later. Projected growth is fiscal year was revised downward to 3.4% and is expected to decelerate in both of the ensuing two years. Quantitative stimulus will be continuing as before, and forward guidance remains the same, too: ” the Bank will continue with QQE with Yield Curve Control, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will continue expanding the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds 2 percent and stays above the target in a stable manner.” At his press conference BOJ Governor Kuroda put a positive spin on recent yen depreciation, claiming such to be orderly and aligned with fundamentals that are not as good in Japan as in other major Western economies.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Japan
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