The monetary policy statement was as follows:-
- The Bank of Japan raised short-term interest rates from -0.10% to 0.10%, according to its statement at the end of the two-day policy meeting in March.
- The central bank abandons the policy of controlling the yield curve, despite pledging to continue its purchases of Japanese government bonds in the same amount as before.
- The Bank of Japan stops the purchase of exchange-traded funds and Japanese real estate investment funds.
- The bank pledged to gradually reduce its purchases of commercial paper and corporate bonds, with the aim of stopping this practice within about a year, and the unanimous vote came to stop the purchase of ETFs.
- The Japanese economy has recovered moderately, although some weakness has partially appeared.
- It is quite possible that wages will continue to increase steadily this year.
- The virtuous cycle between wages and prices has become more solid amid recent data.
- The Bank of Japan believes that the price stability goal will be achieved in a sustainable and stable manner towards the end of the forecast period as indicated in the January forecast report.
The press conference of kazua Ueda, the governor of the bank, came as follows:-
- Massive monetary easing measures have achieved their role, but accommodative financial conditions will be maintained for now.
- Confirms the benign cycle of wages and prices
- We will continue to buy Japanese government bonds in the same amount as before.
- We will use the short-term interest rate as our main tool.
- I'm not thinking of a name for the new policy framework, because it's an ordinary one.
- We will set short-term interest rates like any other central bank.
- Interest rate levels will be determined by the markets.
- Accommodative conditions remain in place and will strongly support the economy and prices.
- We will consider options for easing the policy if necessary, including those used in the past.
- There is still a distance to reach the target price of 2% when looking at inflation expectations.
- The outcome of the spring salary negotiations was a big factor in today's decision.
- If the trend of wage increases widens, then this is a consideration for further political decisions.
- The Bank of Japan is closely watching to see if the trend of large wage increases can widen among small businesses.
