The Bank of Japan resolved on Tuesday to leave its ultra-loose monetary policy unchanged at the final policy meeting of this year, citing high uncertainties in the country, while core inflation is expected to remain above 2% throughout fiscal 2024.
The decision was unanimous by policymakers of Japan’s central bank to keep interest rates at negative 0.1% and also keep its yield curve policy for 10-year Japanese government bonds at its limit of 1% upper bound.
The market had a slight hope for the Bank of Japan to move out of its negative policy rates at this meeting, but the consensus is aimed at April 2024 the earliest, which would make Japan one of the few central banks in the world to tighten monetary policy when other major central banks are gradually shifting toward a dovish move.
Shigeto Nagai, head of Japan economics at Oxford Economics and a former BOJ official also set his expectation for next April.
The yen has been strengthening against the dollar since early December after the comment from Governor Kazuo Ueda sparked hopes in traders to see some changes soon. The Japanese yen is trading at around 143 yen to a single US dollar, compared to a little over 151 yen in mid November.
