The Bank of Japan kept interest rates unchanged, maintaining its highly accommodative monetary policy, in contrast to major central banks that raise interest rates in order to curb price inflation.
But the BoJ has taken steps to make its yield curve control policy more flexible, underlining the growing concern about the growing side effects of prolonged monetary easing.
At the two-day meeting that ended Friday, the Bank of Japan held the short-term interest rate at -0.1 percent, in line with expectations, and the 10-year government bond yield at 0 percent.
He also maintained guidance allowing the 10-year yield to move 0.5% up and down around the 0% target, while saying these would be a “reference” rather than “hard limits”.
The Bank of Japan also said it would offer to buy 10-year Japanese government bonds at 1.0 percent on fixed-rate operations, instead of the previous rate of 0.5 percent.
He also added that the central bank would allow “greater flexibility” in controlling bond yields.
In its statement, the Bank of Japan raised its inflation forecast to 2.5 from 1.8 percent.
The Japanese Central Bank adheres to its stimulus policy as it awaits signs of more sustainable inflation, in contrast to the US Federal Reserve, which raised interest rates 11 times since last year, as well as the European Central Bank, which raised interest rates Thursday for the ninth time in a row, to reach the highest level in 22 years.
The Japanese yen reversed its trend to fall by about 1 percent, after the Bank of Japan decided to adjust its policy to control the yield curve, and the Nikkei newspaper had reported that the central bank would maintain its ceiling at 0.5 percent for government bond yields for ten years, but it is discussing allowing bond interest to rise. long term above this level to a certain extent.
In early trading before the central bank’s decision, the Japanese yen was up 0.55 percent, to 138.72 per dollar.
2023-07-28 03:56:05
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