Bank of Japan leaves short-term interest rates at -0.1% as per expectations

  
Analysis, Economy

Bank of Japan interest rate decision

  • Keeps monetary policy steady
  • maintains a short-term interest rate target at -0.1%
  • maintains 10 year JGB yield target around 0%
  • leaves unchanged for guidance on interest rates, says will keep current extremely low rates for extended period time at least through spring of 2020
  • medium core CPI forecast for fiscal 2019 – 20 at 1.0% versus 1.1% in April forecast
  • risks are skewed to the downside on economy
  • Japan inflation is gradually to accelerate toward 2%
  • won’t hesitate to take extra action if needed
  • won’t hesitate to take additional easing of momentum to goal lost
  • CPI currently at around 0.5%
  • fiscal year 2019 GDP forecast is 0.7% versus 0.8% previously
  • fiscal year 2020 GDP forecast is 0.9% versus 0.9% previously
  • fiscal year 2021 GDP forecast 1.1% versus 1.2% previously
  • sees fiscal year 2019 core CPI including sales tax at 1.0% versus 1.1% previously
  • sees fiscal year 2020 core CPI including sales tax 1.3% versus 1.4% previously
  • sees fiscal year 2021 core CPI forecast 1.6 versus 1.6 previously
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