The Strategist

Bank of Japan keeps monetary policy unchanged, lowers 2024 inflation forecast

01/24/2024 - 05:16

In light of the outcomes of the two-day meeting that concluded on Tuesday, the Bank of Japan decided to maintain the main monetary policy parameters in place.

Asturio Cantabrio
Asturio Cantabrio
The Japanese central bank said in a statement that the target yield on ten-year government bonds is about zero, and the short-term interest rate on deposits held by commercial banks with the Central Bank remains at minus 0.1% annually.

Additionally, the Bank of Japan maintained the benchmark maximum yield on ten-year government bonds at 1% annually.

Analysts and economists anticipated no change in the policy at the January meeting as well.

As a result of a drop in oil prices, the Japanese central bank reduced its inflation prediction for fiscal 2024, which begins on April 1, to 2.4% from 2.8% anticipated in October. This forecast did not include the cost of fresh food. Prices are expected to climb by 1.8% in 2025 as opposed to the 1.7% previously expected.

It is still anticipated that core inflation would hover around 2.8% in the current fiscal year.

The Bank of Japan wants to sustainably raise inflation to the target of 2%.