Japan Interest Rate2022 Data - 1972-2021 Historical - 2023 Forecast - Calendar

The Bank of Japan left its key short-term interest rate unchanged at -0.1% and that for 10-year bond yields around 0% during its June meeting, by an 8-1 vote, as widely expected. The board said it would offer to buy unlimited amounts of the bonds to defend an implicit 0.25% cap every market day, repeating the guidance it made in April. Policymakers viewed that Japan's economy has picked up, despite some weakness due to the impact of COVID-19 and surging commodity prices. Private consumption has recovered, particularly in the service sector; while exports and industrial output have continued to grow. On the price front, the yoy rate of change in the CPI (all items less fresh food) is to be at around 2%. The BoJ reiterated it will not hesitate to take extra easing measures if needed and expected short-and long-term rates to stay at their present or lower levels. Regarding the weak yen, the committee said it must closely watch the impact exchange-rate moves could have on the economy.

The Bank of Japan left its key short-term interest rate unchanged at -0.1% and that for 10-year bond yields around 0% during its April meeting, by an 8-1 vote, as widely expected. Meantime, the central bank said it will offer to buy unlimited amounts of the bonds to defend an implicit 0.25% cap around its 0% target every market day. In a quarterly outlook report, the BoJ said Japan's economy was projected to grow more slowly, amid headwinds from a resurgence in COVID-19 cases and a rise in commodity prices due to the situation in Ukraine. Policymakers cut the FY 2022 GDP growth forecasts to 2.9% from 3.8% made in January and slashed the FY 2021 GDP growth to 2.1% from 2.8%. For the FY 2023, however, the outlook was revised higher to 1.9% from the previous 1.1%. Meantime, inflation for the FY 2022 was revised upward to 1.9% from 1.1% but that for the FY 2023 and 2024 was projected to ease to 1.1%. The BoJ reiterated that it will not hesitate to take extra easing measures if needed.

A rise in commodity and food prices and mounting geopolitical risks due to Russia's invasion of Ukraine may put strong downward pressure on the Japanese economy, the Bank of Japan summary of opinions showed. In the wake of sanctions imposed on Moscow, activities of Japanese firms that have made investment in the country have been constrained, it added. On prices, it is possible that the yoy rate of change in the CPI will rise in positive territory from April, staying around 2% in H1 2022, amid soaring energy cost. From H2, attention needs to be paid to downside risks brought about by to possible declines in commodity prices. Meantime, the underlying inflation is projected to increase as the output gap improves and inflation expectations rise. Regarding monetary stance, members noted it was important for the BoJ to continue its accommodative approach to support the recovery, as Japan was not in a situation where the inflation rate will exceed the price stability target of 2%.