Japan Monetary Policy


Bank of Japan refrains from adding to stimulus as economy recovers moderately

At its 3-4 October monetary policy meeting, the Bank of Japan (BoJ) decided to leave the monetary policy rate 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 617 and 720 billion). This decision was in line with market expectations.

In its accompanying statement, the Central Bank reiterated that the economy is "recovering moderately" and is expected to continue to do so, given that the country's business sentiment trend is continuing upwards and overseas economies are gradually picking up. In terms of price developments, the Bank stated that CPI is within its target range and that, "inflation expectations appear to be rising on the whole." The Bank stated that it will continue with quantitative and qualitative monetary easing as long as it is necessary to achieve the target inflation goal of 2.0%.

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 October 2013

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

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