Bank of Japan interest rate decision
- Keeps monetary policy steady
- maintains a short-term interest rate target at -0.1%
- maintains 10 year JGB yield target around 0%
- leaves unchanged for guidance on interest rates, says will keep current extremely low rates for extended period time at least through spring of 2020
- medium core CPI forecast for fiscal 2019 – 20 at 1.0% versus 1.1% in April forecast
- risks are skewed to the downside on economy
- Japan inflation is gradually to accelerate toward 2%
- won't hesitate to take extra action if needed
- won't hesitate to take additional easing if momentum to goal lost
- CPI currently at around 0.5%
- fiscal year 2019 GDP forecast is 0.7% versus 0.8% previously
- fiscal year 2020 GDP forecast is 0.9% versus 0.9% previously
- fiscal year 2021 GDP forecast 1.1% versus 1.2% previously
- sees fiscal year 2019 core CPI including sales tax at 1.0% versus 1.1% previously
- sees fiscal year 2020 core CPI including sales tax 1.3% versus 1.4% previously
- sees fiscal year 2021 core CPI forecast 1.6 versus 1.6 previously
- sites uncertainty over medium, long-range price expectations
- close attention needed to financial system
- no excessively bullish expectations and asset markets
- Japanese banks have sufficient capital base
- was referring to overseas economic risks in particular
Here is the full statement by the Bank of Japan:
The USDJPY has moved marginally lower lower after the decision as the BOJ failed to ease the forward guidance. The pair moved from 108.78 down to 108.65. We currently trade at 108.69. A lower channel trendline comes in at 108.53 currently.
