Statement from the Bank of Japan after its January 2023 monetary policy meeting.
No change.
- short term interest rate stays at -0.1% target
- 10 year JGB yield target remains around 0%, no change to -0.5% / +0.5% tolerance band
Forecasts:
- core-core cpi median forecast for fiscal 2023 at +1.8%vs +1.6% in October
- core-core cpi median forecast for fiscal 2024 at +1.6% vs +1.6% in October
- real GDP median forecast for fiscal 2023 at +1.7% vs +1.9 % in October
- real GDP median forecast for fiscal 2024 at +1.1% vs +1.5% in October
BOJ QUARTERLY REPORT:
- Japan's economy likely to recover with easing of impact from coronavirus pandemic, supply constraints
- Price growth expected to narrow towards the middle of next fiscal year
- Prices to deviate upward in fiscal 2024
- Uncertainty over japanese economy extremely high
- Need to pay close attention to effects of financial, currency market movements on japan's economy and prices
- Price outlook skewed to upside
- inflation expection is on the rise
- heightening of price growth is likely to sustainable price increase involving wage hikes
- there's a risk global economy could deviate downward due to capital outflow from emerging markets and tightening of global financial conditions
- prices could deviate downwardly as wage hikes won't strengthen as expected
- need to pay close attention to impact of elevated global inflation, rapid currency fluctuations on Japan's prices
- it takes time but prices will gradually rise towards inflation target on the back of rises in inflation expectations and wage rises
More:
- no change to yield band
- no change to yield targets
- decided to extend by one year fund operation to support financial institutions' lending
- no change to forward guidance on interest rates
- decided to enhance fund supply operation against pooled collateral
- maintains guidance that it will continue large-scale JGB buying, make nimble responses for each maturity
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