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According to experts, the current stance of monetary policy in Japan completely satisfies the country’s authorities. Analysts believe that this is the main reason why the government does not want to change the policy. As widely expected, the BoJ kept the interest rate at -0.1 percent on current accounts that commercial banks hold at the central bank. Moreover, the bank maintained its yield target for 10-year Japanese government bonds at around zero percent, within 0.02 percentage points. The regulator also expects the monetary base to increase at an annual pace by around JPY 80 trillion.The Bank of Japan kept settings of monetary policy steady but slightly upgraded its growth outlook for the fiscal 2020 which ends in March. The economy is expected to grow by 0.8 percent in the fiscal 2020 up from the prior estimate 0.2 percent. According to the revised forecast, the projection for fiscal 2020-2021 is lifted to 0.9 percent from 0.7 percent. The BoJ said that inflation in the current fiscal year would not exceed 0.4 percent compared to the previously forecasted 0.5 percent. Moreover, the regulator intends to keep loose monetary policy so that inflation can reach its 2 percent target.The central bank lowered its economic estimates for three of nine regions in the country last week as a result of exports and production activity reduction. Apart from that, the Japanese monetary authorities plan to increase domestic demand which will offset negative consequences of foreign economic problems. According to experts, the BoJ’s optimism over the country's economic conditions helps to retain the current monetary policy steady. The regulator expects the economy to recover. As a result, the monetary policy will not change. The Bank of Japan reckons that) the situation in the country is far from being critical which allows the regulator to improve its growth outlook for the current fiscal year.
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