The Bank of Japan (BOJ) toed the line on monetary policy following its two-day meeting in Tokyo, as officials reiterated their commitment to foster economic growth and inflation through a cocktail of stimulus measures.
The BOJ kept its benchmark interest rate at -0.1%, unchanged since the beginning of 2016. The decision to stand pat was widely expected by investors, who forecast a steady hand with respect to monetary policy for the foreseeable future.
The central bank also maintained its purchase of Japanese government bonds so that the 10-year JGB yield remains at zero percent. The overall value of the bond purchase program was kept at a pace of ¥80 trillion annually.
In reaching their decision, officials also lowered their inflation forecasts for fiscal years 2017-18 and 2018-19. The outlook on GDP growth was revised higher for the same period.
The minutes from the meeting will be released September 26, one month after the Summary of Opinions is issued.
BOJ policy has been left unchanged since last September, when officials shifted their focus from monetary stimulus to yield-curve targeting.
Underpinning the central bank’s slow-go policies is a gradually improving economy. Japan’s gross domestic product (GDP) is riding five consecutive quarters of growth – the longest stretch of uninterrupted growth in more than ten years.
Earlier in the day, the Japanese Ministry of Finance confirmed that exports rose for a seventh consecutive month in June led by shipments of cars and electronics. This signals a return to health for the global economy, which bodes well for Japan.