A pedestrian walks past the Bank of Japan (BoJ) building in central Tokyo on July 28, 2023.
Richard A. Brooks | Afp | Getty Images
The Bank of Japan kept its benchmark rate unchanged on Friday after its monetary policy meeting, keeping its benchmark rate between 0% and 0.1%.
This is in line with the expectations of economists polled by Reuters.
The move was expected, but comes after inflation in Tokyo in April was lower than expected, with the core inflation rate at 1.6%, compared to 2.2% expected by Reuters.
The BoJ also said it would continue to carry out bond purchases in line with the March decision. The bank previously said in March that it had purchased about six trillion yen ($83.5 billion) of bonds per month in the past.
No comments were made by the BOJ on the yenwhich has continued to weaken since the BoJ ended its negative interest rate policy last month and abolished its yield curve control policy.
The currency crossed the 156 mark against the US dollar on Friday after the decision, recently trading at 156.11.
Separately, the central bank also released its outlook for the Japanese economy for the second quarter, raising its inflation outlook for the 2024 fiscal year.
The BoJ now expects inflation of between 2.5% and 3% for fiscal 2024, up from 2.2% to 2.5% in its January forecast.
Inflation is then expected to slow to “around 2%” in fiscal years 2025 and 2026, the bank added.
The BOJ also lowered its gross domestic product growth forecast for fiscal 2024 to a range of 0.7% to 1%, down from January’s forecast of growth of 1% to 1.2%. %.
Remain an accommodating policy
In light of the outlook report, the BoJ said that going forward, the conduct of its monetary policy will depend on future developments in economic conditions and prices. But he said accommodative financial conditions would be maintained “for the time being”.
The BoJ recognizes that uncertainties surrounding these economic and financial developments in Germany and abroad remain high. But if its forecasts come true and underlying inflation rises, the central bank said it would “adjust the degree of monetary easing.”
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News Source : www.cnbc.com
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