Free Trial
AUSSIE 10-YEAR TECHS

(U2) More Stable But Still Fragile

USDCAD TECHS

Trend Structure Remains Bullish

US TSYS

Cautious Risk Appetite Gains Momentum

AUDUSD TECHS

Key Support Still Exposed

US STOCKS

Late Equity Roundup: 2W Highs

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access
MNI INSIGHT: BOJ To Look Through Lower Phone Costs On CPI
(MNI) Tokyo
TOKYO (MNI)

The Bank of Japan is increasingly upbeat about the outlook for the economy, but inflation is unlikely to come close to hitting target before the expiry of Governor Haruhiko Kuroda's term of office in April 2023, it indicated after its April policy meeting.

A "virtuous cycle" from income to spending is underway, Kuroda said on Tuesday, helped by an export sector recovery as the global economy picks up and corporate profits rise, driving an increase in capital investment.

The BOJ's overall risk assessment on economic activity improved, though "risks to prices are skewed to the downside" as falling mobile phone charges weigh, the Outlook Report published Tuesday showed.

MISSING TARGET

The BOJ's first forecasts for fiscal 2023 only saw core CPI rising to 1.0% y/y, leaving the central bank still shy of its 2% target when Kuroda's second term in office expires in April 2023.

"Achieving the 2% price target is a BOJ mission," Kuroda told reporters following the policy meeting, adding that it must remain a core aim for policymakers even the objective is not achieved during his governorship.

The median inflation forecast this fiscal year was lowered to +0.1% from +0.5% in the wake of downward pressure from lower mobile phone charges.

HIGHER GROWTH OUTLOOK

Overall, the economy is expected to continue growing, despite downside risks including a spread of Covid infections, with the median GDP forecast for the current year revised up to +4.0% from +3.9%.

Despite the more upbeat outlook, the BOJ left its yield curve control policy in place, leaving the short-term overnight rate at -0.1% and the 10-year policy interest rate at around zero percent. It maintained forward guidance that the Bank will close monitor the impact of Covid-19 and will not hesitate to take additional easy policy if needed. It expects short- and long-term rates to remain at their present or lower levels

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.