Bank of Japan leaves its key monetary policy planks unchanged, as expected.
- BOJ maintains short-term interest rate target at -0.1%
- maintains 10-year JGB yield target around 0%
The Bank has revised its forecasts though (lower CPI and GDP projections also expected)
- core cpi median forecast for fiscal 2021/22 at 0.0% vs +0.6% in July
- core cpi median forecast for fiscal 2022/23 at +0.9% vs +0.9% in July
- core cpi median forecast for fiscal 2023/24 at +1.0% vs +1.0% in July
- real GDP median forecast for fiscal 2021/22 at +3.4% vs +3.8% in July
- real GDP median forecast for fiscal 2022/23 at +2.9% vs +2.7% in July
- real GDP median forecast for fiscal 2023/24 at +1.3% vs +1.3% in July
And, from the BOJ Quarterly report:
- Japan's economy likely to recover, accelerate pace of growth as pandemic's impact subsides
- Japan's consumer inflation likely to gradually accelerate
- must be vigilant to risks including developments of pandemic, impact on economies
- Japan's economy remains in severe state but picking up as a trend
- exports, output weak due to supply constraints but increasing as a trend
- capex showing weakness in some sectors but picking up as a whole
- service spending remains under pressure but consumption showing signs of pickup
- Japan inflation expectations picking up
- exports, output to slow temporarily on supply constraints
- signs of improvement likely to spread from corporate to household sector
- auto output to slow briefly on supply constraint but solid global it demand to help overall output continue to increase
- Japan's financial system stable as a whole
- Japan's financial intermediation may stagnate if bank profits come under prolonged pressure from covid-19
Headlines via Reuters
