SMM, July 30 / PRNewswire-FirstCall-Asianet /-the Bank of Japan maintained its loose monetary policy as expected, including interest rates at-0.1%, 10-year bond yields near zero and QE at 80 trillion. However, the central bank has increased its rhetoric that it will not hesitate to increase easing if inflation is threatened.
The BoJ kept its short-term interest rate target unchanged at-0.1 per cent as expected and promised to keep 10-year bond yields near zero and remain unchanged at 80 trillion yen. The BoJ maintained its forward-looking guidelines, promising to keep interest rates at current ultra-low levels "for a long time, at least until the spring of 2020".
The point is that the BoJ's interest rate resolution adds the phrase that "if the economy loses momentum to meet its 2 per cent inflation target in the future, then the bank will not hesitate to increase easing".
Against a backdrop of global central bank easing, the BoJ has also vaccinated itself against its next move.
The BoJ's interest rate resolution shows that the current CPI is about 0.5%, and the committee's median (CPI) forecast for the core consumer price index for fiscal 2019 is 1.0%, compared with 1.1% in April.
The BoJ's interest rate resolution cut its GDP forecast for fiscal 2019 from 0.8 per cent; maintained its forecast for GDP growth of 0.9 per cent for fiscal 2020, and unchanged its forecast for GDP growth of 1.1 per cent for fiscal year 2021.
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