BOJ announces no change to JGB Yield Curve Control tolerance band, as widely expected

Statement from the Bank of Japan after its June 2023 monetary policy meeting.

No change.

• BOJ BOJ The Bank of Japan (BOJ) is the central bank of Japan. It was established in 1882 and is headquartered in Tokyo.The BOJ's main responsibilities include issuing and managing the country's currency, implementing monetary policy, and ensuring the stability of the financial system. It also acts as a lender of last resort to banks during times of financial crisis. The BOJ sets the interest rate of the country and sets an inflation target, aiming to achieve 2% inflation.The BoO has a long history, with The Bank of Japan (BOJ) is the central bank of Japan. It was established in 1882 and is headquartered in Tokyo.The BOJ's main responsibilities include issuing and managing the country's currency, implementing monetary policy, and ensuring the stability of the financial system. It also acts as a lender of last resort to banks during times of financial crisis. The BOJ sets the interest rate of the country and sets an inflation target, aiming to achieve 2% inflation.The BoO has a long history, with Read this Term maintains short-term interest rate target at -0.1%
• maintains 10-year JGB yield target around 0%
• maintains band around 10-year JGB yield target at up and down 0.5% each
• made decision on YCC by unanimous vote

The BOJ made an amendment to the principal terms and conditions of the Complementary Deposit Facility

• But adds that there is no change in the framework of the Complementary Deposit Facility and the interest scheme to promote lending

The BOJ on the economy:

• Japan's economy picking up
• Japan's economy likely to continue recovering moderately
• Japan's core consumer inflation likely to slow pace of increase towards middle of current fiscal year
• Exports, output moving sideways
• Capex increasing moderately
• Consumption increasing moderately
• Inflation expectations moving sideways after heightening
• Uncertainty regarding Japan's economy is very high

Note that the BOJ again repeats it expects the pace of inflation to slow from the middle of this Fiscal Year. This would be around September/October (Japan's Fiscal Year begins on April 1).

---

The impact of the announcement has been a move higher for yen crosses. What little doubt there was about BOJ policy change has been removed until the next meeting, scheduled for July 27 & 28. Nikkei 225 futures are up also.

----

Due later:

• Bank of Japan Governor Ueda press conference at 0630 GMT (0230 US Eastern time)