BOJ Remains Dovish, Interest Rates Unchanged - Kakiforex.com - Financial Market Media No. 1 in the World BOJ Remains Dovish, Interest Rates Unchanged BOJ Remains Dovish, Interest Rates Unchanged

April 27, 2021

BOJ Remains Dovish, Interest Rates Unchanged

 The Bank of Japan’s (BOJ) monetary policy announcement in the Asian session saw interest rates remain unchanged at -0.1% and the target for 10 -year Japanese government bond yields was also set at around 0%, as widely expected by the market.


However, in its quarterly outlook report, the central bank has lowered its forecast on core inflation for the current fiscal year to 0.1% from the previous projection made in January of 0.5%.


For the next fiscal year to March 2023, the last year for Haruhiko Kuroda as BOJ Governor, core inflation is projected to increase at 0.8%.



This means that Governor Haruhiko Kuroda does not expect the 2.0% inflation target to be achieved even after 10 years of these major monetary easing measures, including the purchase of government debt and equity as well as interest -free loans to commercial banks.


Meanwhile, policymakers also warned of continued risks to the economic outlook as the rising rise of Covid-19 continues to weigh on consumption.


Meanwhile, the Japanese economy is projected to grow by 4.0% in the current fiscal year. In January, policymakers forecast growth of 3.9%. For fiscal year 2022, growth is expected to increase to 2.4%.


The implementation of tighter sanctions in some Japanese provinces shows why the BOJ continues to be dovish. The declaration of a state of emergency in Tokyo, Osaka, Kyoto and Hyogo has been implemented in response to the continuing increase in Covid-19 cases.