Bank of Japan Governor Kazuo Ueda gestures as he speaks during a press conference following a monetary policy meeting at the Bank of Japan headquarters in Tokyo on July 28, 2023. The Bank of Japan on July 28 loosened its grip on its ultra-loose monetary policy. In a small step towards normalization as inflation accelerates and the yen comes under pressure against other major currencies. (Photo by Jiji Press/AFP) / Japan Exit (Photo by STR/Jiji Press/AFP via Getty Images)
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The Bank of Japan is expected to maintain its ultra-loose monetary policy at its first meeting this year, while lowering its forecast for core inflation for the next fiscal year.
The Bank of Japan unanimously decided to keep interest rates at -0.1%, and stuck to the yield curve control policy that keeps the upper bound for the 10-year Japanese government bond yield at 1% as a reference, according to the policy statement issued on Tuesday.
All economists polled by Reuters expected the Bank of Japan to maintain its negative interest rate policy this month – making the Bank of Japan the only central bank in the world with negative interest rates.
In a speech in December, Governor Kazuo Ueda struck a pessimistic tone.
In its quarterly forecasts for the Japanese economy, members of the Bank of Japan’s board of directors lowered their average forecast for core consumer price growth to 2.4% for fiscal 2024 starting in April, compared to 2.8% in their estimate in October.
The central bank also marginally increased its core CPI inflation estimate for fiscal year 2025 to 1.8% from 1.7% previously forecast.
This is a developing story. Please check back for more updates.