In the first monetary policy meetings of the Japanese bank under the leadership of the new governor Kazuo Ueda, the bank fixed the interest rate as it is at -0.10% levels and kept Japan's 10-year government bond yield at 0.00%.
The most important points of the statement were: -
- It is appropriate to maintain accommodative monetary policy and keep interest rates unchanged.
- The Bank of Japan will continue to keep the range of moves of Japan's 10-year government bond yields within the range of 0.5% both up and down.
- Scrap future guidance that pledged to keep the interest rate at current or low levels.
- The Bank of Japan will continue to expand the monetary base until inflation exceeds 2% levels and remains above target in a stable way.
- The Bank of Japan will take additional facilitation steps to stabilize the market without hesitation if necessary.
- The Bank of Japan will spend nearly a year and a half to conduct a review of future monetary policy guidance.
- Japan's economy fell into contraction in the late 1990s and achieving price stability has been a challenge for a long period of time.
As Ueda said
- A policy review does not mean monetary easing was ineffective.
- Ueda acknowledged Allen's decline today but does not want to comment on that.
- The chance to start exiting monetary easing in the next 1.5 years is "not zero."
- But the chance to postpone that to two, 3 or 4 years later is also unfortunately "not zero."
The summary, The backdrop that emerged in today's meeting decision was that the BOJ is likely to stick to its current policy settings without lending, there was a small percentage of market traders hoping for a surprise but disappointed.
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