Monetaries expect the Japanese economy to contract between 4.5 percent and 5.7 percent in the fiscal year ending March 2021. In the previous report three months ago, the BOJ had forecast a decline of between 3 and 5 percent.
The core inflation rate without fresh food is expected to be minus 0.5 percent and minus 0.7 percent for the current year. The latest projections show that the BOJ is unlikely to reach its 2 percent inflation target in at least two years. Currencies expect core inflation to rise 0.7 percent in March 2023, the end of the fiscal year.
The BOJ’s monetary policy body has held on to its short-term interest rate target of minus 0.1 percent and has kept the target return on 10-year Japanese bonds unchanged at around zero percent.
The Board also maintained its annual target of 12 trillion yen ($ 111.91 billion) for the purchase of exchange-traded funds, and the cap on the purchase of commercial paper and corporate bonds remains unchanged at 20 trillion yen.
Tokyo (Dow Jones)
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