BOJ keeps monetary policy settings unchanged in April, USD/JPY unmoved


The Bank of Japan (BOJ) left its monetary policy settings untouched following the conclusion of its two-day April monetary policy review meeting on Tuesday.

The central bank kept the benchmark policy rate on hold at -10bps while maintaining its pledge to buy J-REITS at an annual pace of up to JPY180 bln.

At its March policy meeting, the BOJ clarified that the 10-year JGB yield may move up or down 0.25% (not 0.2%) around its 0% target. The central bank also altered the ETF buying limits - removing the lower ceiling of 6 trillion yen ($55 billion) while keeping an upper limit of 12 trillion yen. 

Statement summary

BOJ’s decision on yield curve control made by 8-1 vote.

Board member Kataoka opposes decision on yield curve control.

Board's real GDP median forecast for fiscal 2021 at 4.0% vs +3.9% in Jan.

Board's real GDP median forecast for fiscal 2022 at 2.4% vs +1.8% in Jan.

Board's real GDP median forecast for fiscal 2023 at 1.3%.

Board's core CPI median forecast for fiscal 2021 at +0.1% vs +0.5% in Jan.

Board's core CPI median forecast for fiscal 2022 at +0.8% vs +0.7% in Jan.

Board's core CPI median forecast for fiscal 2023 at +1.0%.

Market reaction 

With the initial market reaction, USD/JPY barely moved and held its range around 108.35.

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