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:

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Stay tuned for Bank of Japan Governor Kuroda at his press conference due at 0630GMT