BOJ announce no change to policy, as expected

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BOJ announce no change to policy, as expected

The BOJ's main policy planks remain unchanged:

• short-term interest rate target -0.1%
• 10-year bond yield around 0%, but flexible up to 1% (in October 2023 the Bank made it even more flexible by saying the 1% bound is only a 'reference')

Makes no changes to forward guidance on monetary policy

---

No change to core-core inflation forecasts:

• 
  Core-core CPI fiscal 2023 median forecast at +3.8 vs +3.8% forecast in the October Outlook Report
• Core-core CPI fiscal
  2024 median forecast at +1.9% vs +1.9% in October
• Core-core CPI fiscal
  2025 median forecast at +1.9% vs +1.9% in October

But core forecasts trimmed:

• Core CPI fiscal 2023 median forecast at  +2.8% vs +2.8% in October
  
• Core CPI fiscal 2024
  median forecast at +2.4% vs +2.8% in October 
  
• Core CPI fiscal 2025
  median forecast at +1.8% vs +1.7% in October

GDP forecasts:

• FY 2023 1.8% vs. 2.0% in October
• FY 2024 1.2% vs. 1.0% in October
• FY 2025 1.0% vs. 1.0% in October

BOJ quarterly
report:

• Risks to economic
  activity generally balanced
• Need to closely
  monitor whether virtuous cycle between wages and prices will
  intensify
• Will continue with
  QQE with YCC as long as needed
• Won't hesitate to
  take additional easing steps if needed
• Boj will patiently
  continue with monetary easing while nimbly responding to developments
• Japan's financial
  system has maintained stability on the whole

• 
  Uncertainty remains but likelihood of achieving sustained 2%
  inflation continues to gradually heighten
• Japan's economy
  likely to continue recovering moderately
• Must be vigilant to
  financial, fx market moves and their impact on japan's economy,
  prices
• Inflation
  expectations gradually heightening
• Core consumer
  inflation moving below 2.5%, partly reflecting moderate rise in
  service prices
• Consumption
  continues to rise moderately
• Inflation likely to
  gradually accelerate toward boj's target through end of projected
  period in quarterly report
• Japan's output gap
  improving, likely to gradually expand ahead
• Medium-, long-term
  inflation expectations heightening gradually
• Positive cycle of
  rising wages, inflation to strengthen

---

Still to come, and of even more focus, is Bank of Japan Governor Ueda's press conference due at 0630 GMT.

                This article was written by Eamonn Sheridan at www.forexlive.com.

Source: BOJ announce no change to policy, as expected

forexlive.com