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The Bank of Japan kept its key short-term interest rate unchanged at -0.1% and continue its yield curve control strategy for 10-year government bonds, following its January monetary policy review meeting on Tuesday.
The central bank also maintained a 1.0% upper band for the long-term government bond yield.
The BoJ’s stance comes as central banks around the world are usually raising interest rates to battle inflationary pressures, the BoJ’s position stands in stark contrast.
Meanwhile, in a quarterly outlook report, the BoJ slashed CPI readings for FY 2024 to 2.4% from October’s projections of 2.8%, reflecting a recent decline in oil prices. For 2025, the board said that it expects core inflation to hit 1.8%, slightly higher than its earlier estimates of 1.7%.
Regarding economic growth, policymakers cut their 2023 GDP growth forecast to 1.8% from 2.0% in prior projections.
For FY 2024, the bank revised higher its GDP outlook to 1.2% from 1.0%, supported by pent-up demand. Governor Kazuo Ueda recently said he saw no immediate need to change the BoJ’s dovish stance.
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