Interest Rate in Japan
Japan - Interest Rate
BoJ keeps policy steady while upgrading economic forecasts
The Bank of Japan (BoJ) maintained its monetary policy stance at its 26–27 April meeting, voting to continue with its Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control program as long as is necessary to achieve and maintain its 2.0% inflation target. The Bank voted 7–2 to leave the existing policy in place, which was in line with market expectations.
Despite upgrading its view of the economy, the Bank decided to keep its current accommodative monetary policy stance unchanged on the back of still subdued inflationary pressures. At the monetary policy meeting’s press conference, Governor Haruhiko Kuroda highlighted that, “the time to start on exit strategy is when we achieve the 2 per cent objective.” In this regard, the Bank left its inflation projections mostly unchanged at between 0.6% and 1.6% for Fiscal Year 2017 (previously: 0.8%-1.6%). The Bank’s estimates for FY 2018 were also left broadly unrevised at between 0.8% and 1.9% (previously: 0.9%-1.9%).
Nevertheless, the Bank was more upbeat about Japan’s economic outlook and stated that, “[the] economy is likely to continue expanding and maintain growth at a pace above its potential, mainly through fiscal 2018.” Bold policy support and stronger global demand will fuel Japan’s economic growth. That said, the Bank warned that the positive economic cycle might end in FY 2019 due to the planned sales tax hike. About GDP, the BoJ foresees the economy expanding between 1.4% and 1.6% in FY 2017 (previously: between +1.3% and 1.6%), while growth will decelerate slightly to between 1.1% and 1.3% in FY 2018 (previously: between +1.0% and 1.2%).
The analysts FocusEconomics polled this month expect the BoJ short-term policy rate to end this year at minus 0.10%, and also see it ending 2018 at minus 0.11%. The 10-year bond yield is expected to be 0.07% by the end of this year, before rising to 0.11% in 2018.FocusEconomics Consensus Forecast panelists expect the yen to trade at 117.4 per USD at the end of 2017. For 2018, the panel projects the yen to strengthen marginally to 117.2 per USD.
Japan - Interest Rate Data
|Policy Interest Rate (%)||0.10||0.10||0.10||0.10||0.10|
5 years of economic forecasts for more than 30 economic indicators.
Japan Interest Rate Chart
Source: Bank of Japan.
|Bond Yield||0.04||22.86 %||May 10|
|Exchange Rate||114.3||0.26 %||May 10|
|Stock Market||19,900||0.29 %||May 10|
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May 22, 2017
Nominal exports in Japan valued in yen increased 7.5% from the same month last year in April, following March’s 12.0% increase.
May 17, 2017
Although core machinery orders (a leading indicator of capital spending over a three- to six-month period) expanded for the second consecutive month in March, they weakened in Q1 compared to Q4 2016, suggesting that businesses investment likely weakened in the three months up to March.
May 8, 2017
Japanese consumer sentiment declined from 43.9 in March to 43.2 in April.
April 28, 2017
In March, Japan's core consumer price index was flat from the previous month, matching February’s result.
April 28, 2017
Industrial production in Japan fell 2.1% in March compared to the previous month in seasonally-adjusted terms, contrasting February’s eight-month high of a 3.3% increase.