The Bank of Japan maintained its monetary policy stimulus unchanged and lifted its inflation forecast for the next fiscal year citing a rise in commodity prices.
The board, governed by Haruhiko Kuroda, on Tuesday, voted 8-1, to hold the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.
The bank will continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
The board decided, by a unanimous vote, to extend by one year the deadline for loan disbursement under the Fund-Provisioning Measure to Stimulate Bank Lending.
With regard to the risk balance, risks to economic activity are skewed to the downside for the time being, and risks to prices are generally balanced, the bank said.
The central bank forecast consumer prices to remain flat in the current fiscal year but raised its inflation projection for the fiscal 2022 to 1.1 percent from 0.9 percent.
For the fiscal 2023, inflation is seen at 1.1 percent versus the previous outlook of 1 percent.
The bank downgraded its growth outlook for the fiscal 2021 to 2.8 percent from 3.4 percent and upgraded its projection for the next fiscal to 3.8 percent from 2.9 percent.
The growth forecast for the fiscal 2023 was lowered to 1.1 percent from 1.3 percent.
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