The Bank of Japan’s First Board Meeting of Governor Ueda’s Stewardship
April 28, 2023
Governor Ueda did not initiate a clean break away from his predecessor’s policy, retaining a short-term interest rate of -0.1%, an target of around zero percent for the 10-year JGB yield, with a 0.5 percentage point daily buffer, and a commitment to more stimulus if and when such is deemed necessary to keep an eventual achievement of 2% inflation on track. There is to be a broad review of the overall approach to monetary policy and how such affects all aspects of Japan’s economy, but that study could take 18 months and so has no immediate policy implications. Rate-setting decisions were made unanimously. A newly published quarterly BOJ Outlook for Economic Activity and Prices revises projected GDP growth this fiscal year down 0.3 percentage points to 1.4% and projects lessening growth of 1.2% in fiscal 2024 and 1.0% in fiscal 2024. Likely CPI inflation was bumped up to 1.8% for FY23 and 2.0% for FY24 but then is seen receding to a sub-target 1.6% in fiscal 2025. Core CPI inflation this fiscal year of 2.5% will be followed by 1.7% in fiscal 2024 and fiscal 2025.
Tags: Bank of Japan
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