Bank of Japan Monetary Policy Decision - 19 June 2023

Policy status quo maintained as BoJ waits for signs of a more sustainable demand-pull inflation

Bank of Japan (BoJ) kept ultra-loose monetary policy settings unchanged. The BoJ kept the short-term policy rate at -0.1%, long-term interest rate target band at 0.5%, and reiterated its readiness to take additional easing measures if necessary.

Unanimous vote on Yield Curve Control (YCC)

  • The short-term policy interest rate: maintained a negative interest rate of -0.1% to the Policy-Rate Balances in current accounts held by financial institutions at the BoJ.
  • The long-term interest rate: to purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit to keep the 10-year JGB yields at around 0.0%.
    • To implement the above guideline for market operations, the BoJ will continue to allow 10-year JGB yields to fluctuate in the range of around +/- 0.50% from the target level and will offer to purchase 10-year JGBs at 0.5% every business day through fixed-rate purchase operations.