BOJ announce no change to monetary policy

The Bank of Japan October 2020 meeting has concluded

The Bank has downgraded their view on fiscal year 2020 economic growth, also for the CPI
Main points:
  • maintains short-term interest rate target at -0.1%
  • maintains 10-year jgb yield target around 0%
  • decision on yield curve control made by 8-1 vote
  • board member Kataoka opposes decision on yield curve control

Quarterly report:

 

  • Japan’s economy likely to improve as a trend
  • consumer prices to fall for time being
  • consumer prices to turn positive as economy improves, gradually accelerate pace of increase
  • there is extremely high uncertainty over economic, price outlook
  • risks to Japan’s economic, price outlook skewed to downside
  • medium-, long-term inflation expectations to hover on a weak note, but resume uptrend as prices gradually rise
  • Japan’s financial intermediation may stagnate if financial institutions’ profits come under prolonged pressure from covid-19
  • BOJ will take additional easing steps without hesitation as needed with eye on impact of covid-19 on economy

 

Forecasts:

Real gdp median forecast for fiscal 2020/21 at -5.5% vs -4.7% in July

 

 

  • real gdp median forecast for fiscal 2021/22 at +3.6% vs +3.3% in July
  • real gdp median forecast for fiscal 2022/23 at +1.6% vs +1.5% in July

 

Core cpi median forecast for fiscal 2020/21 at -0.6% vs -0.5% in July

 

  • core cpi median forecast for fiscal 2021/22 at +0.4% vs +0.3% in July
  •  core cpi median forecast for fiscal 2022/23 at +0.7% vs +0.7% in July

 

Headlines via Reuters

Full text:

 

 

 

If you would prefer a ‘picture speaks 1000 words’ summary of the BOJ outlook: