BOJ Keeps Monetary Policy Unchanged

Economy Politics

Tokyo, March 18 (Jiji Press)--The Bank of Japan decided to leave its ultraloose monetary policy unchanged Friday, in stark contrast to moves for policy tightening by central banks elsewhere in the world in order to stem inflation.

At its two-day meeting that ended the same day, the BOJ's Policy Board voted eight to one to keep the central bank's short-term policy interest rate at minus 0.1 pct and continue guiding 10-year Japanese government bond yields around zero pct.

In a statement to announce the policy decision, the BOJ voiced concern over the fallout of Russia's invasion of Ukraine, saying that global financial and capital markets "have been volatile" and that prices of commodities such as crude oil "have risen significantly." Future developments "warrant attention," it added.

The central bank said that the Japanese economy "has picked up as a trend" although "some weakness has been seen in part" mainly due to the impact of the novel coronavirus pandemic. The view is weaker than the BOJ's previous assessment given in January that a pickup in Japan's economy "has become evident" as the COVID-19 impact at home and abroad has waned gradually. The BOJ also lowered its assessment on consumption, saying that a pickup in private spending "has paused."

The year-on-year rate of change in Japan's core consumer price index is "likely to increase clearly in positive territory" for the time being due to surges in commodities and materials prices partly reflecting economic sanctions imposed on Russia over its military aggression in Ukraine, the BOJ said.

[Copyright The Jiji Press, Ltd.]

Jiji Press Bank of Japan