The Bank of Japan July monetary policy meeting has finished - statement out now. Pretty much as expected.
Monetary policy is unchanged:
- Maintains short-term interest rate target at -0.1 pct
- Maintains 10-year jgb yield target around zero pct
- Leaves unchanged pledge to buy JGBs so that its holdings increase at annual pace of around 80 trln yen
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Forecasts:
Real GDP ... given a boost:
- expected +1.8 pct in fy2017/18 vs +1.6 pct projected in April
- expected +1.4 pct in fy2018/19 vs +1.3 pct projected in April
- expected +0.7 pct in fy2019/20 vs +0.7 pct projected in April
Japan core CPI 'forecasts' all lowered ... pushes back timing for hitting 2 pct inflation target (likely to see inflation reach 2 pct around fiscal 2019):
- expected +1.1 pct in fy2017/18 vs +1.4 pct projected in April
- expected +1.5 pct in fy2018/19 vs +1.7 pct projected in April
- expected +1.8 pct in fy2019/20 vs +1.9 pct projected in April
ps. if you think you have invented movable goalposts I have some bad news for you, the BOJ have had 'em for years on their inflation forecasts
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BOJ's quarterly report:
- Recent moves in CPI have been relatively weak
- Rise in medium to long term inflation expectations has been lagging behind somewhat
- Inflation expectations projected to rise as firms gradually raise wages, prices
- CPI likely to continue uptrend, increase toward 2 pct
- Projected rate of increase in CPI is lower mainly for the first half of 3 year projection period in BOJ's quarterly report
- Risks to economy, prices are skewed to downside
- Momentum toward hitting price target is maintained but not yet sufficiently firm
- BOJ to make policy adjustments as appropriate with view to maintaining momentum toward achieving price target
