Bank of Japan Governor Kuroda speaks later at 0630GMT - stay tuned for that

From the statement:

  • Maintains 80 trln yen base money target and 0.1 pct negative interest rate
  • To review once every 3 months ratio of reserves for which negative interest rate will be applied
  • BOJ says will exempt money reserve funds (MRF) from negative interest rates
  • Removes language from its statement that it will cut interest rates further into negative territory if judged necessary
  • BOJ will take additional easing steps in 3 dimensions of quantity, quality and interest rate, if needed to hit price target
  • Economy continues to recover moderately as a trend
  • Pickup in exports has recently paused
  • Industrial production has continued to be more or less flat
  • Inflation expectations rising from longer-term perspective but have recently weakened
  • Japan's economy likely to expand moderately as a trend
  • Uncertainty on emerging economies, impact of fed policy on markets among risks to outlook
  • Global markets have remained volatile

  • Must pay attention to risk that market volatility hurts business confidence, delays a shift from deflationary mindset

  • Will apply zero rates to twice the size of increase in loans banks offer under boj's loan support programme

  • Exemption of MRF from negative rate will take effect from May April

Headlines via Reuters

Note:

  • The vote on negative rates was 7 to 2
  • The vote on asset purchase was 8 to 1

--

The news is that there is no change in policy from this meeting. There are lots of details (see above), but that's the key takeaway. 'No change' was the expected result today, so the market got that right. The BOJ is assessing the impact of the changes made at the January meeting at present.


Gotta say, this is a bit of a head scratcher:

  • Removes language from its statement that it will cut interest rates further into negative territory if judged necessary

Also, the exemption of MRF from negative rates is a step back from the wide application of negative rates and should act as a yen positive.