Business News Asia
As expected, the Bank of Japan (BOJ) maintained a particularly loose monetary policy at its meeting today. This includes leaving the key interest rate at -0.1% and keeping the target yield for 10-year government bonds at 0%.
At the meeting, the BOJ lowered its forecast for Japanese economic growth in 2022 to 2.9% from 3.8% and raised its forecast for the core consumer price index (CPI) to 1.9% from 1.1%.
Investors are waiting for today’s statement from BOJ Governor Haruhiko Kuroda. The slump in the yen is now expected to put pressure on Kuroda to explain why the BOJ decided to maintain its monetary policy today. Concerns are growing that the yen’s decline will cause import costs to skyrocket and hurt the Japanese economy, which relies on imports of commodities.
Financial markets are also watching how the BOJ assesses the depreciation of the yen. The yen fell to its lowest level in 20 years, reflecting the difference between the BOJ’s long-standing accommodative monetary policy and the Federal Reserve’s introduction of tighter monetary policy.