TOKYO, Japan’s central bank decided on Wednesday to maintain its ultra-low interest rates policy, including its 0.5 percent limit for long-term bond yields it introduced last month.
At a two-day policy meeting, Bank of Japan’s (BOJ) Governor Haruhiko Kuroda and his eight board colleagues made the decision to keep short-term interest rates at minus 0.1 percent and guiding 10-year government bond yields around zero percent within the 0.5 percent cap, according to a statement released by the BOJ.
In a statement, the bank said “it will support financing, mainly of firms, and maintain stability in financial markets, and will not hesitate to take additional easing measures if necessary, expecting short- and long-term policy interest rates to remain at their present or lower levels”.
The Central Bank, on the other hand, cut its growth projection of the world’s third-largest economy for the current fiscal year through March, saying gross domestic product (GDP) will grow at a 1.9 percent annual pace, down from a previous estimate of 2.0 percent expansion in October.
“Japan’s economy is likely to recover toward the middle of the projection period, with the impact of COVID-19 and supply-side constraints waning, although it is expected to be under downward pressure stemming from high commodity prices and slowdowns in overseas economies,” it noted.
The BOJ revised up growth forecast for Japan’s core consumer price index to 3.0 percent in fiscal 2022, compared with the 2.9 percent estimated earlier.
The year-on-year rate of increase in the consumer price index is likely to be relatively high in the short run due to the effects of a pass-through to consumer prices of cost increases led by a rise in import prices, it said.
Source: Kuwait News Agency