Of all the major central banks right now, few are as boring as the Bank of Japan (BoJ).
It left monetary policy unchanged at the conclusion of its October board meeting, an outcome that looks set to become a recurring theme for several years to come.
The bank decided to maintain its quantitative and qualitative monetary easing (QQE) with yield curve control program, keeping interest rates unchanged at -0.1% while pledging to buy Japanese government bonds (JGB) so that 10-year JGB yields will remain at around 0%.
It repeated that it would buy JGBs at an annual pace of around 80 trillion yen, adding that it will “continue expanding the monetary base until the year-on-year rate of increase in the observed CPI exceeds 2% and stays above the target in a stable manner”.
The board voted 8-1 in favour of maintaining the program, again unchanged from September.
Goushi Kataoka, having joined the board in July, was the only member to dissent, arguing that additional monetary policy easing was necessary given the risk of inflation undershooting the bank’s target.
It also voted unanimously to keep annual purchases of exchange traded funds, Japan real estate investment trusts and corporate paper and bonds unchanged at about 6 trillion yen, 90 billion yen and 5.4 trillion respectively.
Again, the same as its previous meeting.
The bank also kept is assessment of the Japanese economy unchanged, noting that it was “expanding moderately”.
Even its updated economic forecasts were largely as expected with the bank yet again trimming its forecasts for inflation, an outcome that is now regarded by markets as the norm rather than the exception.
Here’s the bank’s latest forecasts for GDP growth and core inflation, comparing them to those issued three months ago.
Reflecting that nothing much has changed, markets are largely unmoved on the news.
The full monetary policy statement and economic assessment can be accessed here.