Japan Monetary Policy


Bank of Japan keeps monetary policy steady

At its 20-21 November monetary policy meeting, the Bank of Japan (BoJ) decided to keep its stance on monetary policy unchanged. The Bank also unanimously decided to continue implementing money market operations so that the monetary base - its main policy instrument - would increase at an annual pace of between JPY 60 and 70 trillion (approximately USD 608 and 710 billion). This decision, which was in line with market expectations, aims at achieving the price stability target of 2.0%. In its accompanying statement, the Central Bank stated that the economy, "has been recovering moderately," and that it is expected to continue to do so. The BoJ underlined three potential risks to the Bank's outlook projection: uncertainty regarding the European debt crisis; developments in the emerging and commodity-exporting economies; and the pace of recovery in the United States. In terms of price developments, the Bank stated that inflation expectations, "appear to be rising on the whole," and that CPI, "is likely to rise gradually," going forward. The next monetary policy meeting is scheduled for 19-20 December. All of the FocusEconomics Consensus Forecasts panelists expect the collateralized overnight call rate to remain unchanged at between 0.0% and 0.1% both this year and next.

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Japan Monetary Policy Chart

Japan Monetary Policy November 2013

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

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