BoJ Holds Monetary Policy Steady


The Bank of Japan left the interest rate unchanged at -0.1 percent at its October 2016 meeting, as widely expected. Policymakers also decided to maintain its 10-years government bond yield target around zero percent.

With regard to the amount of JGBs to be purchased, the bank will conduct buying at more or less the current pace -- an annual pace of increase of about 80 trillion yen.

The Policy Board also decided by a 7-2 vote to purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) so that their amounts outstanding will increase at an annual paces of about JPY 6.0 trillion and about JPY 90 billion, respectively. As for CP and corporate bonds, the Bank will maintain their amounts outstanding at about 2.2 trillion yen and about 3.2 trillion yen respectively. 

Meanwhile, at a quarterly reviews of the central bank's forecasts, again, it pushed back the timing for reaching its 2 percent inflation target to around fiscal year of 2018. Previously the bank said it would reach its target in fiscal 2017. The momentum toward achieving the price stability target of 2 percent seems to be maintained but somewhat weaker than in the previous outlook. For the next fiscal year ending in March 2018, the outlook for core consumer inflation is cut to 1.5 percent from 1.7 percent projected earlier in July. The forecast for the GDP came in at 1.3 percent, unchanged from the previous estimates.

BoJ Holds Monetary Policy Steady


Bank of Japanl Rida Husna | rida@tradingeconomics.com
11/1/2016 4:29:13 AM