Japan Monetary Policy


Bank of Japan remains upbeat on economic recovery and inflation developments

At its 7-8 August monetary policy meeting, the Bank of Japan (BoJ) decided to leave the monetary policy unchanged for the fifth consecutive month. The Bank also unanimously decided to conduct money market operations so that the monetary base - its main policy instrument - will increase at an annual pace of between JPY 60 and 70 trillion (approximately USD 624 and 727 billion). This decision was in line with market expectations.

In its accompanying statement, the Central Bank maintained its view that the economy, "is starting to recover moderately." The BoJ stated that overseas economies are gradually picking up, thereby supporting demand for Japanese goods, while domestic demand is also improving. Regarding price developments, the Bank affirmed that inflation expectations appear to be increasing and consumer prices are likely to rise gradually.

All FocusEconomics Consensus Forecasts panellists expect the collateralized overnight call rate to remain unchanged at between 0% and 0.1% both this year and next.

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Japan Monetary Policy Chart

Japan Monetary Policy August 2013

Note: Collateralized overnight call rate in %.
Source: Bank of Japan (BoJ).

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