Haruhiko Kuroda’s Bank of Japan is confirmed as a white fly among the central banks of many other economies, committed to averting and taming new flares of inflation.
Today the central bank of Japan confirmed the reference interest rates at the minimum level ever, or at -0.1%, which means that monetary policy is still based on the instrument of negative rates, at which Christine’s ECB Lagarde has now given up with her monetary straits.
The 10-year Japanese JGB government bond yield target was confirmed around zero.
The BOJ announced the decision to end the anti-Covid funding program, which expires this month. Still, he predicts that both short and long-term rates will remain “at current levels or lower”.
Kuroda & Co remarked that they are ready to launch new expansive monetary policy maneuvers “without hesitation, in case of need, looking at the impact of the Covid pandemic on the economy”.
“We need to be vigilant about financial and forex movements and their impact on Japan’s economy and prices,” the statement read.
The yen weakened to 145 against the US dollar following the BOJ announcement.
“Japan’s economy has improved thanks to the resumption of economic activity – with citizens’ health protected by Covid (with vaccines) – despite being affected by some factors such as the increase in commodity prices”, reads the central bank press release.
Yen sells remain strong, with the dollar-yen ratio jumping 0.57% to 144.85, benefiting from the hawkish attitude of Jerome Powell’s Fed.
Yesterday, the Federal Reserve raised US rates again by 75 basis points, bringing them in the range between 3% and 3.25%, the record since 2008, and proceeding to the third consecutive tightening of 75 basis points.