New Governor of Bank of Japan Chairs First Monetary Policy Meeting... "Maintaining Large-Scale Monetary Easing"

Decision Made to Conduct Multifaceted Review of Past Monetary Easing Policies

The Bank of Japan (BOJ) held its first Monetary Policy Meeting since the leadership change on the 28th and decided to maintain its large-scale monetary easing policy.

According to the Nihon Keizai Shimbun and others, at this meeting chaired by Governor Kazuo Ueda, who took office on the 9th, the BOJ decided to keep the short-term interest rate at -0.1% and continue guiding the 10-year government bond yield, a long-term interest rate indicator, around 0% as part of its large-scale monetary easing policy.

Kazuo Ueda, Governor of the Bank of Japan
Photo by Reuters Yonhap News

In the Monetary Policy Meeting last December, the BOJ decided to guide the 10-year government bond yield target around 0%, but expanded the allowable fluctuation range of the yield target from "about ±0.25%" to "about ±0.5%" and committed to purchasing long-term government bonds without an upper limit.

This was evaluated by the market as effectively raising long-term interest rates, but this time, the BOJ did not change the allowable fluctuation range of the long-term interest rate target.

Governor Ueda has expressed his intention to continue monetary easing for the time being during his appearances in the National Diet, and it is expected that he will gradually seek an exit strategy to address side effects of monetary easing such as high inflation and distortions in long-term interest rates.

However, at this meeting, the BOJ decided to conduct a multifaceted evaluation and review of the monetary easing policy introduced since the late 1990s. The policy review period is expected to take about one to one and a half years. Previously, comprehensive reviews of monetary policy were conducted in 2016 and inspections in 2021. The Nihon Keizai Shimbun reported that "this review process is planned not to be directly linked to policy decisions."

Governor Ueda is scheduled to explain the policy decision details at a press conference this afternoon.

This content was produced with the assistance of AI translation services.