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

Dhwani Mehta FXStreet

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.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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