MNI BoJ Review April 2024: Policy Unchanged, Notably Brief Statement, Data-Dependent Outlook

Executive Summary:

• The BoJ convened its Monetary Policy Meeting on April 25-26, maintaining unanimous agreement to retain all major monetary policy parameters unchanged.
• Following a significant shift made in the March meeting, which saw the departure from the negative interest rate policy (NIRP), the decision to keep the policy rate guidance steady within a band of 0 to +0.1% was widely anticipated by markets.
• The accompanying statement was notably brief, spanning just three sentences.
• Governor Ueda refrained from offering a clear timeline for initiating the BoJ's balance sheet reduction.
• As anticipated, the primary focus of the press conference centred on the exchange rate. He noted that the Board members assessed the impact of the yen's depreciation thus far on inflation to be limited, influencing the decision to maintain the status quo at this meeting.
• In the Outlook Report, the overall economic outlook was assessed as unchanged at "has recovered moderately, although some weakness has been seen in part".
• Looking ahead, it is anticipated that the BoJ will adjust rates to mitigate disruptions to the real economy while ensuring overall financial conditions remain supportive.
• While the BoJ appears inclined towards further rate hikes, there are no indications in its outlook suggesting immediate policy tightening.
• See the full review here:

BOJ Review - Apr 2024.pdf