Bank of Japan kept interest rates unchanged
The Bank of Japan has not changed its monetary policy and expects higher inflation in 2024.
The Bank of Japan (BOJ) kept the policy rate unchanged after the monetary policy meeting on Friday and kept the benchmark policy rate between 0 percent and 0.1 percent. This is in line with economists’ expectations.
The move was expected but came after Tokyo’s April inflation came in lower than expected; The core inflation rate was 1.6 percent, compared to economists’ expectations of 2.2 percent.
BOJ also announced that it will continue to purchase bonds in line with its March decision.
There was no comment from the BOJ about the yen. Following the decision, the currency exceeded 156 points against the dollar on Friday and was last traded at 156.11.
Inflation forecast updated
Separately, the central bank also published its second-quarter outlook for the Japanese economy and raised its inflation outlook for fiscal 2024.
The Bank of Japan increased its core inflation forecast from 2.4 percent to 2.8 percent. The Bank of Japan revised its growth forecast for this year from 1.2 percent to 0.8 percent.
Inflation is expected to slow “around 2 percent” in fiscal years 2025 and 2026, the bank added.