Tokyo, 28 April, /AJMEDIA/
The Bank of Japan on Friday maintained ultralow interest rates as expected at the new Governor Kazuo Ueda’s inaugural policy meeting, specifically mentioning the need for greater wage growth to achieve its inflation target that will likely remain elusive.
At the end of the two-day policy meeting, the BOJ said it will conduct a review of its monetary policy framework over the past decades from a “broad perspective.” It will spend the next year or so on completing the assessment.
Despite years of aggressive monetary easing, the central bank has yet to achieve its 2 percent inflation goal in a stable manner, with core consumer prices in fiscal 2025 now forecast to rise 1.6 percent from a year earlier.
The BOJ set short-term interest rates at minus 0.1 percent while guiding 10-year Japanese government bond yields to around zero percent, under a yield curve control program.
In revised policy guidance, the BOJ said it will maintain the program “as long as it is necessary” to attain the 2 percent inflation target “accompanied by wage increases.”
It dropped the previous expression that it expects short- and long-term rates to remain at “current or lower levels.”
The BOJ raised its inflation forecasts for the current and next fiscal years.
The core consumer price index, excluding volatile fresh food items, is projected to rise 1.8 percent in fiscal 2023, up from its previous estimate of 1.6 percent, and then 2.0 percent in fiscal 2024, up from 1.8 percent.
“Japan’s economy has picked up, despite being affected by factors such as past high commodity pri
