Japan’s central bank keeps monetary policy

Japan’s central bank decided on Friday to maintain its ultra-low interest rates policy, while announced a broad review of its monetary easing measures it has implemented over years.

At a two-day policy meeting, the first under Bank of Japan’s (BOJ) new Governor Kazuo Ueda, policymakers made the decision to keep short-term interest rates at minus 0.1 percent and guiding 10-year government bond yields around zero percent within the 0.5 percent cap, according to a statement released by the BOJ.

The central bank also said it will conduct a “broad-perspective review” of monetary policy dating back to the late 1990s, with a planned time frame of around one to one and a half years.

The BOJ has implemented various monetary easing measures “since the late 1990s, when Japan’s economy fell into deflation. Achieving price stability has been a challenge for a long period of 25 years,” it said.

Meanwhile, in its outlook report published after the meeting, the BOJ revised down growth forecast for the world’s third-largest economy, saying it is expected to grow 1.4 percent in the current fiscal year, compared with the 1.7 percent growth estimated in January.

“Japan’s economy is likely to recover moderately toward around the middle of fiscal 2023, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from past high commodity prices and a slowdown in the pace of recovery in overseas economies,” the central bank said.

The BOJ raised its inflation outlook for fiscal 2023 to 1.8 percent, up from its previous forecast of a 1.6 percent increase

Source: Kuwait News Agency