The Bank of Japan left monetary policy unchanged

At the end of the two-day meeting the Bank of Japan left rates unchanged at -0.1% and kept the amount of asset purchases at 80 trillion yen per year. The target level for the yield of 10-year bonds remained near 0%. The Bank of Japan also left unchanged the volume of ETF purchases at 6 trillion yen per year

According to the forecasts of the Central Bank core consumer price index increased by 1.7% in fiscal year 2018 compared to the previous forecast of + 1.7%.

The base consumer price index is likely to grow by 1.5% in fiscal year 2017 compared to the previous forecast of + 1.5%. The base consumer price index probably fell to 0.2% in fiscal year 2016 compared to the previous forecast of -0.1%. The Bank of Japan expects that inflation will reach 2% in fiscal year 2018

The Bank of Japan expects real GDP growth at 1.4% this year compared to the previous forecast of + 1.0% and by 1.5% in 2017 compared to the previous forecast of + 1.3%. The central bank expects real GDP to grow by 1.1% in fiscal year 2018 compared to the previous forecast of + 0.9%

Also, the Bank noted that the risks to the outlook for inflation and GDP shifted to the downside, although the pace of growth slightly above previous forecasts due to the state of foreign economies and a weak yen.