By Megumi Fujikawa
TOKYO (Dow Jones)–The Bank of Japan has its ultra-loose monetary policy leave unchanged. The upper limit for the yield on ten-year government bonds remains at 0.5 percent, the deposit rate at minus 0.1 percent, the Bank of Japan (BoJ) announced. The risk of premature rate hike in Japan could be greater than a delay in monetary tightening, said Bank of Japan (BoJ) Governor Kazuo Ueda. Inflation is likely to fall below the bank’s 2% target later in the year, added Ueda, who has headed the BoJ since April.
The BoJ’s decision follows separate actions by the Federal Reserve and the European Central Bank this week. The Fed held interest rates steady after ten straight hikes, while the ECB raised rates by a quarter of a point and announced more hikes.
The 10-year Japanese government bond yield has remained stable below the bank’s 0.5 percent ceiling since global bond yields fell in March on worries about the US and European financial systems.
The pace of Japanese consumer price inflation has slowed recently as the government took steps to lessen the burden of higher energy costs. However, some economists believe inflation may be more sustainable than the BoJ expects as consumer prices excluding fresh food and energy continue to rise.
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(END) Dow Jones Newswires
June 16, 2023 00:18 ET (04:18 GMT)