FOREX TradingCharts.com

Financial News: Bank Of Japan Maintains Yield Curve Control Defying

Bank Of Japan Maintains Yield Curve Control Defying Expectations

01/18/2023 - 01:55:00 (RTTNews)

(RTTNews) - The Bank of Japan left its yield curve control, a core pillar of the monetary policy, unchanged on Wednesday, defying expectations for a tweak in its ultra-loose monetary regime as the central bank spend trillions to safeguard the yield target.

The Policy Board of the BoJ, led by Governor Haruhiko Kuroda, unanimously decided to maintain a negative interest rate of -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will also continue to purchase a necessary amount of JGBs without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

After unexpectedly expanding the tolerance band of 10-year JGB yields in <a href=https://www.rttnews.com/3333083/bank-of-japan-widens-10-year-jgb-yield-target-band.aspx target=_blank >December</a>, the bank today maintained the stance that it will allow yields to fluctuate in the range of plus and minus 0.5 percentage points from the target level.

The increase in its medium-term inflation forecasts by BoJ suggests that YCC will be abandoned once a new Governor takes over in April, Capital Economics economist Marcel Thieliant said.

The economist said the case for abandoning the policy look increasingly compelling as the government is unhappy with soaring inflation with wage growth failing to keep up and real wages plummeting. Moreover, the aim of improving market functioning by widening the tolerance band has not been met, Thieliant added.

Reports suggested that the current Deputy Governor <a href=<https://www.rttnews.com/3337313/japanese-govt-to-present-nominees-for-boj-top-jobs-on-february-10.aspx> target=_blank >Masayoshi Amamiya</a> or his predecessor Hiroshi Nakaso are the front-runners in the race to be at the helm of the Japanese central bank when Kuroda's term ends on April 8.

The BoJ also decided to extend by one year the deadline for loan disbursement under the Fund-Provisioning Measure to Stimulate Bank Lending and to expand the range of eligible counterparties for the Funds-Supplying Operations to Support Financing for Climate Change Responses.

The bank also enhanced the Funds-Supplying Operations against pooled collateral.

In the latest Outlook for Economic Activity and Prices, released today, the central bank said risks to economic activity are skewed to the downside for fiscal 2022 and 2023, but are generally balanced for fiscal 2024. Risks to prices are skewed to the upside, the bank added.

The bank raised its <a href=https://www.rttnews.com/3326814/japan-core-inflation-at-40-year-high.aspx target=_blank >inflation outlook</a> for the fiscal 2022 to 3.0 percent from 2.9 percent and maintained the forecast for the fiscal 2023 at 1.6 percent. For the fiscal 2024, inflation is seen at 1.8 percent, up from 1.6 percent estimated in October. The upward revision reflects the waning of the effects of those measures pushing down energy prices of the previous year.

At the same time, the bank downgraded its real growth projections for the fiscal 2022 and 2023 citing overseas economies deviating downward from the baseline scenario, although government measures contributed positively to growth.

The growth outlook for the fiscal 2022 was trimmed marginally to 1.9 percent from 2.0 percent and that for the fiscal 2023 to 1.7 percent from 1.9 percent.

Due to a waning of the effects of those measures pushing up the economy of the previous year, the projection for the fiscal 2024 was downgraded to 1.1 percent from 1.5 percent.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2023 RTTNews.com. All Rights Reserved

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS


Australia Trade Surplus A$12.237 Billion In December (31 min(s), 04 sec(s) ago)
(RTTNews) - Australia posted a seasonally adjusted merchandise trade surplus of A$12.237 billion i ...Full Story»

Japan Household Spending Sinks 1.3% On Year In December (01 hr(s), 34 min(s), 04 sec(s) ago)
(RTTNews) - The average of household spending in Japan was down 1.3 percent on year in December, t ...Full Story»

Australia Interest Rate Decision Due On Tuesday (02 hr(s), 41 min(s), 04 sec(s) ago)
(RTTNews) - The Reserve Bank of Australia will wrap up its monetary policy meeting on Tuesday and ...Full Story»

UK Car Registrations Rise 14.7% In January: SMMT (11 hr(s), 12 min(s), 04 sec(s) ago)
(RTTNews) - UK car registrations increased for the sixth straight month in January on the back of ...Full Story»

UK Construction Activity Registers Another Downturn (12 hr(s), 17 min(s), 04 sec(s) ago)
(RTTNews) - The UK construction sector posted another contraction in January as rising interest ra ...Full Story»

Rise In Eurozone Sentix Investor Confidence Eases Recession Fears (12 hr(s), 49 min(s), 04 sec(s) ago)
(RTTNews) - Eurozone investor confidence strengthened to hit an 11-month high in February, replaci ...Full Story»

Slovenia Inflation Falls Slightly To 10% (12 hr(s), 55 min(s), 04 sec(s) ago)
(RTTNews) - Slovenia's consumer price inflation eased marginally at the end of the year, thoug ...Full Story»

Hungarian Retail Sales Fall For First Time In Nearly 2 Years (12 hr(s), 59 min(s), 04 sec(s) ago)
(RTTNews) - Hungary's retail sales volume declined for the first time in 21 months in December ...Full Story»

Search

INTERNATIONAL FINANCIAL NEWS

Australia Trade Surplus A$12.237 Billion In December

02/06/2023 - 19:40 PM (RTTNews)
(RTTNews) - Australia posted a seasonally adjusted merchandise trade surplus of A$12.237 billion i ...Full Story>>

Japan Household Spending Sinks 1.3% On Year In December

02/06/2023 - 18:37 PM (RTTNews)
(RTTNews) - The average of household spending in Japan was down 1.3 percent on year in December, t ...Full Story>>

Australia Interest Rate Decision Due On Tuesday

02/06/2023 - 17:30 PM (RTTNews)
(RTTNews) - The Reserve Bank of Australia will wrap up its monetary policy meeting on Tuesday and ...Full Story>>

UK Car Registrations Rise 14.7% In January: SMMT

02/06/2023 - 08:59 AM (RTTNews)
(RTTNews) - UK car registrations increased for the sixth straight month in January on the back of ...Full Story>>

UK Construction Activity Registers Another Downturn

02/06/2023 - 07:54 AM (RTTNews)
(RTTNews) - The UK construction sector posted another contraction in January as rising interest ra ...Full Story>>

Do not sell my personal information

Copyright © 2023. All market data is provided by Barchart Solutions. Information is provided "as is" and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.