Japan Monetary Policy


Bank of Japan refrains from implementing additional easing

At its 10-11 June monetary policy meeting, the Bank of Japan (BoJ) approved to maintain its monetary policy unchanged. The Bank also decided, by a unanimous vote, 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 between USD 618 and 717 billion), in a decision that was in line with market expectations.

In its accompanying statement, the Central Bank upgraded its view on the economy and now affirms that the economy "has been picking up". On the external front, the Bank stated that overseas economies started to improve gradually, thereby stimulating demand for Japanese goods. Regarding price developments, the Bank acknowledged that although consumer prices continued to record negative rates, some indicators point to a rise in inflation expectations. As it was expected, the Bank of Japan did not make any reference to either the recent jitters in the bond and currency markets.

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

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Japan Monetary Policy Chart

Japan Monetary Policy June 2013

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

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