Bank of Japan Retains Ultra-Easy Monetary Policy Amid Economic Uncertainty

Governor Kazuo Ueda indicates close monitoring of wage increases as the bank cuts its core inflation forecast for the next fiscal year.

The Bank of Japan (BOJ) has maintained its ultra-easy monetary policy, keeping its short-term rate target at negative 0.1% and the 10-year Japanese Government Bond yield at around 0%.
BOJ Governor Kazuo Ueda has indicated that the bank is closely monitoring wage increases to determine whether they will sustainably keep inflation at its 2% target.
The BOJ has cut its core inflation forecast for the next fiscal year starting in April to 2.4%, down from the 2.8% estimated in October.
Despite the negative interest rate policy, the BOJ is seen as moving towards normalization of its monetary policy, with an exit from negative rates expected as early as April.
The BOJ's decision comes amidst uncertainty over the economic impact of the recent magnitude 7.6 earthquake that struck Ishikawa Prefecture.