The Bank of Japan refrained from tweaking monetary policy at its November monetary policy meeting, keeping interest rates and its target for the 10-year JGB yield at -0.1% and 0% respectively.
The vote was passed 7 to 2.
It also stated that it would purchase Japanese government bonds (JGBs) at an annual rate of about 80 trillion yen, unchanged from the levels specified at its previous meeting.
The full monetary policy statement can be accessed here.
On the outlook for inflation, the BOJ downgraded its forecasts for core CPI for the next three financial years, which was widely expected by financial markets.
This year core inflation is seen at -0.1%, down from the +0.1% level in July, while that for 2017/18 and 2018/19 was revised down by 0.2 percentage points respectively to 1.5% and 1.7%.
The Bank of Japan’s price stability target is currently 2% per annum.
Its forecasts for real GDP were left unchanged, with the growth of 1%, 1.3% and 0.9% seen in fiscal year 2016, 2017 and 2018 respectively.
Here’s the forecasts from the bank’s outlook for economic activity and prices report, released alongside the monetary policy decision. It can be accessed in full here.
On the outlook for both economic activity and prices, the BOJ warned that risks for both were “skewed to the downside”.
“On the price front, the momentum towards achieving the price stability target of 2 percent seems to be maintained, but is somewhat weaker than the previous outlook, and thus developments in prices warrant careful attention moving forward,” the BOJ said.
As it has stated previously, it said that it “will continue with ‘Quantitative and Qualitative Monetary Easing with Yield Curve Control’ as long as it it is necessary for maintaining that target in a stable manner”.
It also said that it would make “policy adjustments as appropriate, taking account of developments in economic activity and prices as well as financial conditions, with a view to maintaining the momentum towards achieving the price stability target”.
The admission that risks to its price and activity forecasts has helped to weaken the yen with the USD/JPY trading at 104.92, near its highs for the session.
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