Bank of Japan Monetary Policy Decision - 20 March 2024

Delivers its first hike since 2007 and scraps the yield curve control

A pivotal moment in history. The Bank of Japan (BoJ) became the last central bank in the world to abandon the negative interest rate policy, alongside terminating its yield curve control measures. However, it maintained its bond-buying operations, provided no future guidance on further policy normalisation and pledged to maintain accomodative financial conditions.

7-2 majority vote on guideline for market operations

  • The short-term policy interest rate: transitioned towards a more conventional approach by setting the overnight call rate in a range of 0.0 – 0.1%.
    • To achieve this guideline, the BoJ will apply an interest rate of 0.1% to deposits held by financial institutions at the Bank.
  • The long-term interest rate: the BoJ, in an 8-1 majority vote, commits to buying Japanese government bonds as necessary to prevent a rapid increase in interest rates.