Bank of Japan (BoJ) decided on Friday to leave key interest rates unchanged, with a short-term interest rate target of a negative 0.1% and the 10-year bond yield target of around 0%. The bank will also continue to allow the yields to fluctuate 0.5 percentage points below and above the target level.
The BoJ said the Japanese economy has "picked up" while the pace of recovery of overseas economies has slowed. Employment, income, and private consumption all improved moderately. The pace of growth is expected to slow gradually, with the annual inflation seen decelerating toward the middle of the fiscal year, and then picking up moderately afterward. Outlook risks continue to be highly uncertain, with the bank vowing to continue monetary easing while monitoring developments and aiming to achieve a 2% inflation target in a "sustainable and stable manner, accompanied by wage increases."
