The Bank of Japan – the central bank of Japan led by Haruhiko Kuroda – has announced that it has confirmed the target of short-term interest rates at -0.1%, and the target of 10-year government bond rates around zero .
The institution’s dovish attitude contrasts with those of the Federal Reserve and the Bank of England: the Fed raised fed funds rates for the first time since 2018 on Wednesday 16 March, to the new range between 0.25% and 0.50%, while the BoE announced its third consecutive monetary tightening, bringing UK rates to 0.75% yesterday.
The BoJ, whose desperate attempt to raise inflation in Japan is now a coincidence, has issued a warning about the risks that the war in Ukraine is triggering.
The conflict between Russia and Ukraine, the BoJ recalled, is destabilizing financial markets and pushing up the costs of raw materials.
“The uncertainty about the impact that developments in Ukraine could have on Japan’s economy is very high,” the central bank warned.
Precisely because of the inflationary pressures that are rising around the world, the Bank of Japan has reported that it believes that Japan will be able to hit or even exceed the inflation target, set at 2%, in the coming months.
However, the BoJ has no plans to withdraw its massive monetary stimulus, as it believes that inflation, triggered by the energy price boom, is transitory, in the face of an economy that has just begun to recover from the aftermath of the Covid pandemic. 19.