The members of the Board of the Bank of Japan (BOJ) they left the Principal interest rate unchanged at -0.10% after wrapping up its October two-day monetary policy review meeting this Thursday. The central bank also kept its oJGB 10-year bond yield target at 0.00%.
Monetary policy statement
The decision on the control of the yield curve was taken by 8 votes in favor and 1 against.
Kataoka, a board member of the BOJ, opposed the decision on the control of the yield curve.
Japan lives a extremely high uncertainty on the economic impact of Covid-19.
If comprehensive health measures are restored, economic activity is likely to slow down significantly.
Uncertainty about the pricing behavior of companies is a price risk.
The future developments in forex and commodity prices are a price risk.
There is a drop in demand due to a moderate economic activity that is likely to push down on goods and services sensitive to economic activity.
Price cuts intended to stimulate demand have not been widely seen to date.
There is great uncertainty about how companies will set prices and how this will affect overall prices.
On the other hand, the BoJ published its Quarterly Outlook Report, in which it was highlighted that the risks to the Japanese economy are inclined to the downside.
The forecast of Start real conducted by the Board of the Bank of Japan for the fiscal year 2020/21 falls to -5.5% from -4.7% expected in July.
The forecast for the Basic CPI in the same period of time 2020/2021 descends to -0.6% compared to the -0.5% projected last July.
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Credits: Forex Street
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