BoJ Maintains Monetary Stimulus
The Bank of Japan left its massive monetary policy stimulus unchanged on Wednesday and expects the economy to recover at a moderate pace from the downturn caused by the coronavirus pandemic.
The Policy Board of the Bank of Japan voted 8-1 to retain the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.
The bank will continue to purchase necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
The economy is forecast to improve gradually from the second half of the year with economic activity resuming, but the pace is expected to be only moderate while the impact of the novel coronavirus remains worldwide.
According to the quarterly outlook report, the economy will contract 4.7 percent this fiscal year, before expanding 3.3 percent in 2021 and 1.5 percent in 2022.
Consumer prices are forecast to fall 0.5 percent in the fiscal 2020. The bank project prices to rise 0.3 percent next fiscal and 0.7 percent in fiscal 2022.