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Bank of Japan Overview

Bank of Japan Overview

Asian stock markets saw broad gains with the Nikkei gaining 1.4% after a BoJ announcement, which was dovish in nature, and left policy settings the same, but also signaled a review over a longer period of time, while reiterating that the easing bias is still present.

The BoJ called for a “broad perspective review” of policyThe timeframe is between 1 and 1.5 years. There were rumors about this, particularly after the Nikkei article hinted as such. But it was not clear it would be announced today at Governor Ueda’s first meeting. Bank policy remained unchanged at a YCC yield target of 0% for 10-year JGBs and a YCC rate of -0.1%. The decision to set the rate was unanimous, 9-0. The Bank has also announced that it will no longer be providing forward guidance. The Bank said it will “patiently continue” with monetary easing. The risks for the fiscal 2023 price outlook are on the upside. However, the downside risk for fiscal 2025 is the opposite. Core CPI will be forecast at 1.8%, up from the previous 1.6% for fiscal 2023 and at 2.0% for fiscal 2024. The GDP is forecast to be 1.4% versus 1.7% in fiscal 2023, and 1.2% compared with 1.1%.

Ueda says BoJ won’t hesitate to add easing if needed….

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