The Bank of Japan has maintained the monetary policy parameters and lowered the inflation forecast in 2024

The Bank of Japan decided to maintain the main parameters of monetary policy after a two-day meeting that ended on Tuesday. 

The short-term interest rate on deposits from commercial banks remained at minus 0.1% per annum, and the target yield on ten-year government bonds was about zero. The Bank also confirmed the benchmark for the maximum yield of ten-year government securities at the level of 1% per annum. 

The inflation forecast for fiscal year 2024 was lowered to 2.4% excluding the cost of fresh food, reflecting a decrease in oil prices. The GDP growth forecast for 2023 has been revised to 1.8%, while the estimate for the current year has been improved to 1%.

The head of the Bank of Japan, Kazuo Ueda, said that the probability of achieving the inflation target is gradually increasing, although it is difficult to assess how close the central bank is to it. Ueda also noted that the issue of ending the ultra-soft PREP will be considered when the bank is confident of achieving its goal.