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The Bank of Japan announced no change to monetary policy as widely expected. The BOJ short-term interest target kept at -0.1% and the 10 year JGB yield target remains around 0%. The ETF buy cap stays at 12tln yen. The bank expects core consumer inflation to hit 0.1% in the current fiscal year.


BOJ kuroda

 BoJ Chief Kuroda

BOJ April 2021 Monetary Policy Decision Statement

 

Highlights

Rates and ETF

  • Bank of Japan short-term interest target kept at -0.1%
  • 10 year JGB yield target remains around 0%
  • ETF buy cap stays at 12tln yen  

BOJ edged up its forecasts for economic growth, Outlines Inflation

  • BoJ says its forecasts are based on vaccine rollout easing the impact of the pandemic:
  • Real GDP median forecast for fiscal 2021 at 4.0% vs +3.9% in January
  • Real GDP median forecast for fiscal 2022 at 2.4% vs +1.8% in January
  • Real GDP median forecast for fiscal 2023 at 1.3%
  • BoJ inflation target is 2%
  • BOJ said it expects core consumer inflation to hit 0.1% in the current fiscal year that began in April (0.5% was projected in January)
  • Expects core consumer inflation to hit 0.8% in 2022, 1.0% in fiscal 2023 

BOJ Quarterly Report

  • Japan's economy likely to improve as a trend but pace of recovery to remain moderate
  • Consumer prices likely to fall for the time being risks to economic outlook skewed to the downside for the time being
  • Expect financial intermediation to play out smoothly under financial system stability
  • There is big uncertainty on outlook likely to avoid downward pressure strengthening on real economy from financial front
  • Japan's financial system remains stable as a whole
  • If coronavirus infections increase more than expected, worsening of the real economy will affect financial system stability, further putting downward pressure on real economy
  • At this point, such risk is not seen large but need to closely watch outlook
  • Ahead of BoJ Japan announced setting up mass vaccination centers in Tokyo & surrounding prefectures
  • Japanese PM Suga will enlist help of the military to do so.

Source: BoJ

From The Traders Community News Desk

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