Bank of Japan to Continue Monetary Easing Amidst Economic Uncertainty

James Hyerczyk
Updated: Apr 28, 2023, 13:14 GMT+00:00

Bank of Japan to continue monetary easing with negative interest rate and asset purchases for price stability and sustained wage increases.

Bank of Japan

BOJ Statement on Monetary Policy Highlights

  • Negative interest rate of -0.1% to be applied to Policy-Rate Balances
  • Purchases of JGBs, ETFs, and J-REITs to be continued
  • Bank aims to achieve 2% price stability target accompanied by wage increases

BOJ Statement on Monetary Policy Overview

Bank of Japan Applies Negative Interest

On April 28, 2023, the Bank of Japan issued its Statement on Monetary Policy, which outlines its decisions regarding yield curve control and asset purchases.

The Bank decided to apply a negative interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank and to purchase a necessary amount of Japanese government bonds (JGBs) to maintain 10-year JGB yields at around zero percent.

Bank of Japan to Purchase ETFs, J-REITs

The Bank will also purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) as necessary, and will maintain the amount outstanding of commercial paper at about 2 trillion yen.

Bank of Japan Commits to Stability

In addition, the Bank will maintain the stability of financing and financial markets, and will continue with monetary easing while nimbly responding to developments in economic activity and prices as well as financial conditions.

The Bank aims to achieve the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases.

Bank of Japan to Expand QQE

The Bank will continue with Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control, and will expand the monetary base until the year-on-year rate of increase in the observed consumer price index (CPI, all items less fresh food) exceeds 2 percent and stays above the target in a stable manner.

The Bank will also conduct a broad-perspective review of monetary policy with a planned time frame of around one to one and a half years.

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About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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