Breaking: BoJ steers policy on a steady course, USD/JPY jumps
28.04.2023, 04:02

Breaking: BoJ steers policy on a steady course, USD/JPY jumps

At Bank of Japan (BoJ) Governor Kazuo Ueda’s first monetary policy meeting, the central bank’s board members decided to make no changes to their current monetary policy settings, maintaining rates and 10yr JGB yield target at -10bps and 0.00% respectively.

Summary of the statement

No change to yield band.

BoJ maintains band around its 10-year JGB yield target at up and down 0.5% each.

BoJ made decision on YCC by unanimous vote.

To conduct examination of monetary policy.

BoJ tweaks forward guidance.

BoJ removes forward guidance that pledged to keep interest rate at current or lower levels.

Will continue expanding monetary base until year-on-year rate of increase in CPI exceeds 2% and stays above the target in stable manner.

Will take additional easing steps without hesitation as needed while striving for market stability.

BoJ removes reference to COVID-19 pandemic from its forward guidance.

Will spend 1 to 1-1/2 years to conduct review on monetary policy guidance.

Japan's economy fell into deflation in late 1990s, achieving price stability has been a challenge for long period of 25 years.

During this period, BoJ has implemented various monetary easing steps.

Market reaction

USD/JPY storms through the 134.50 level on BoJ’s policy announcements. The pair is currently trading at 134.54, up 0.48% on the day.

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