BOJ announce: No change to monetary policy

Author: Eamonn Sheridan | Category: Central Banks

The Bank of Japan monetary policy decision on January 23 2018

  • keeps monetary policy steady
  • maintains short-term interest rate target at -0.1 pct
  • maintains 10-year JGB yield target around zero pct
  • leaves unchanged pledge to buy JGBs more or less at current pace so its holdings increase at annual pace of around 80 trln yen
  • BOJ: Japan core CPI expected +1.4 pct in fy2018/19 vs +1.4 pct projected in October  
  •  Japan core cpi expected +1.8 pct in fy2019/20 vs +1.8 pct projected in Oct
  •  BOJ raises assessment on inflation expectations in quarterly report
  •  BOJ extends deadline for its loan programmes aimed at boosting growth potential by 1 year

 BOJ quarterly report:

  • Japan's economy expected to expand moderately
  • BOJ will maintain QQE with yield curve control for as long as needed to stably hit 2 pct inflation
  • BOJ will adjust policy as needed to sustain momentum to hit price goal with eye on economy, price and financial developments
  • Risks to economy roughly balanced
  • Risks to prices tilted to downside
  • Inflation expectations recently moving sideways
  • Inflation likely to continue increasing towards 2 pct
  • CPI accelerating but moves remain weak
  • Momentum for hitting 2 pct inflation is maintained but lacks strength
  • consumer inflation currently moving around 1 pct
  • Inflation expected to reach 2 pct around fiscal 2019/20
  • inflation expectations and job market pose both upside, downside risks
  •  moves in forex and commodities markets pose both upside, downside risks
  •  prices for some goods are insensitive to changes in supply-demand gap
  •  loss of trust in fiscal policy could increase uncertainty, lead to rise in long term yields
  • BOJ's decision on yield curve control made by 8-1 vote, board member Kataoka dissents
  • Kataoka says BOJ should buy JGBs so yields of bonds with maturities of 10 years or longer fall broadly

Those headline points abaove at via rtrs Reuters  summary of the Statement. Full text is here:

And, the full text of the updated outlook report:
USD/JPY dropped a few points, sharpish but not large. 

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