Bank of Japan Maintains Monetary Policy... Lowers This Year's Consumer Price Inflation Forecast to 0.1%

Haruhiko Kuroda, Governor of the Bank of Japan
Photo by Reuters Yonhap News Agency

[Asia Economy Reporter Byunghee Park] The Bank of Japan, Japan's central bank, concluded its two-day monetary policy meeting on the 27th and decided to maintain its existing monetary easing policy.

According to Kyodo News, the Bank of Japan decided to continue its short- and long-term interest rate control, guiding the short-term policy rate at minus (-) 0.1% and the long-term rate at around 0%. It also decided to continue its policy of purchasing exchange-traded funds (ETFs) with an annual cap of 12 trillion yen, adjusting to market conditions to support the stock market.

The Bank of Japan lowered its forecast for this year's consumer price inflation rate (year-on-year) from the previous 0.5% to 0.1%, citing moves by major telecommunications companies to reduce mobile phone charges. The Bank of Japan's annual consumer price inflation target is 2%.

The forecast for this year's real economic growth rate was raised by 0.1 percentage points from the previous 3.9% to 4.0%.

Regarding the current economic situation, the Bank of Japan maintained its assessment that although difficulties continue due to the impact of COVID-19 and other factors, the economic trend is on a recovery path.

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