The Bank of Japan, in its meeting this morning, Friday, July 16, decided by a majority of eight members to zero, with one abstention, to extend the financing program period for a new six months until the end of March 2022, and the Bank decided by a majority of 7-1 with one abstention to maintain the current negative interest rates. Unchanged at -0.10, in addition to buying a larger amount of JGBs, without specifying a ceiling.
With regard to asset purchases other than JGB purchases, the Bank decided by a majority of members and one member abstaining from continuing to purchase ETFs and J-REITs up to a maximum of 12 trillion yen and about 180 billion yen respectively, and the Bank would purchase CP and corporate bonds with a maximum of 20 trillion yen until the end of September this year.
The statement issued by the bank indicated that it will continue monetary and qualitative easing while controlling the yield curve until it reaches its inflation target.
On the other hand, the bank issued its economic outlook report, which is announced every three months, as the bank lowered its growth forecast for the current year compared to April’s expectations due to the impact of the new strain of the Corona virus, while raising its expectations for growth next year, inflation expectations rose strongly during the current year due to a rise energy prices.
In details, the bank reduced its growth forecast for the current year to 3.8%, compared to 4% in the April forecast. It is expected that growth in the next year 2021 will rise to 2.7%, compared to 2.4% in the April forecast, while maintaining 1.3% as an expected growth rate in the year 2023. She is in the forecast for April.
Inflation expectations came to rise by about 0.6% for the current year, compared to 0.1% in the expectations of April, while it is expected to rise to 0.9% in the next year 2021, compared to 0.8% in the expectations of April. The bank maintained its expectations for the year 2023, with inflation rising to 1%.
The Japanese yen is trading at 110.21 levels against the US dollar, with losses of more than 40 pips since the beginning of the session.
07/11/2024
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