BOJ leaves monetary policy unchanged, as widely expected


The Bank of Japan (BOJ) board members left the key rates unchanged at -10bps after concluding its two-day October monetary policy review meeting on Thursday. The central bank also maintained its 10yr JGB yield target at 0.00%.

Statement summary

Decision on yield curve control made by 8-1 vote.

BOJ board member Kataoka opposes decision on yield curve control.

Must watch covid-19 impact on domestic, overseas economies.

Must watch covid-19 impact on firms', households' growth expectations.

Must watch covid-19 impact on financial system developments.

Extremely high uncertainty over covid-19 economic impact.

If wide-ranging health measures reinstated, likely to significantly curb economic activity.

Uncertainty over firms' price-setting behaviour is risk to prices.

Future developments in forex, commodity prices are risk to prices.

Fall in demand due to curbed economic activity likely to put downward pressure on goods and services sensitive to economic activity.

Price cuts aimed at stimulating demand not seen widely to date.

High uncertainty over how firms will set prices and how this will impact general prices.

Market reaction 

USD/JPY shows little reaction to the BOJ announcement, keeping its range around 104.50. 

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