The Bank of Japan, as expected, kept short-term interest rates at -0.1% and at the same time stated that 1% would continue to be its reference point for the upper bound on the yield of the 10-year Japanese government bond, although that is not a hard limit. The latest decision by policymakers indicates a preference to wait for additional indications on whether wages will rise enough to keep inflation near the 2% target for a long time.
"The Bank of Japan will continue to maintain stable financing, mainly for firms and financial markets, and will not hesitate to take additional monetary easing measures if necessary," the Central Bank said.
"In the face of extremely high uncertainty surrounding the economy and financial markets at home and abroad, the Bank will patiently continue to ease monetary policy, responding promptly to changes in economic activity and prices, as well as financial conditions," the Bank of Japan said.
At the same time, experts expect that soon the Bank of Japan will end its policy of negative interest rates and to phase out yield curve control later in 2024.