2023.01.1803:20:00UTC+00Bank Of Japan Keeps Rate, Yield Curve Control Unchanged

The Bank of Japan kept its interest rates as well as yield curve control unchanged and modified some of its lending programs.

The Policy Board of the BoJ unanimously decided to maintain a negative interest rate of -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will also continue to purchase a necessary amount of JGBs without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

After unexpectedly expanding the tolerance band of 10-year JGB yields in December, the bank today maintained the stance that it will allow yields to fluctuate in the range of plus and minus 0.5 percentage points from the target level.

The board also decided to extend by one year the deadline for loan disbursement under the Fund-Provisioning Measure to Stimulate Bank Lending and to expand the range of eligible counterparties for the Funds-Supplying Operations to Support Financing for Climate Change Responses.

In the latest Outlook for Economic Activity and Prices, released Wednesday, the central bank raised its inflation outlook for the fiscal 2022 to 3.0 percent from 2.9 percent and maintained the forecast for the fiscal 2023 at 1.6 percent.

For the fiscal 2024, inflation is seen at 1.8 percent, up from 1.6 percent estimated in October.

The bank lowered its fiscal 2022 growth outlook to 1.9 percent from 2.0 percent. Similarly, the growth projection for the fiscal 2023 was trimmed to 1.7 percent from 1.9 percent.

In the fiscal 2024, real growth is forecast to slow to 1.1 percent, which was down from the previous outlook of 1.5 percent.