MNI BRIEF: BOJ On Hold And Keeps Policy Forward Guidance

The Bank of Japan board Thursday decided to stand pat on monetary policy as the economy largely continued moving in line with the baseline scenario despite lingering uncertainties and downside risks.

The BOJ also left the forward guidance for the policy rates, indicating the policymakers are vigilant against the near-term downside risk to economy and saw the need to keep easing bias regarding the outlook for monetary policy, (See: MNI STATE OF PLAY:BOJ To Stand Pat On Policy, Forward Guidance).

“For the time being, the BOJ will closely monitor the impact of Covid-19 and will not hesitate take additional easing measures if necessary, and also it expects short- and long-term interest rates to remain at their present or lower levels.”

The BOJ also maintained its unlimited fixed-rate bond buying operations for consecutive days as the policymakers saw a rise in interest rates is undesirable amid lingering downside risks to economy.