The Bank of Japan ended a two-day meeting on Thursday, keeping its ultra-low rate policy unchanged, as widely expected, despite raising its inflation outlook amid growing energy costs and a weak yen.
The central bank kept interest rates at minus 0.1% and its target for the 10-year Japanese government bond yield at around zero, in bid to support the nation’s economic recovery from the pandemic.
According to the bank’s quarterly outlook announced Thursday, the policy board anticipates core consumer prices excluding volatile fresh food prices to rise 2.3% in the current fiscal year ending March 2023, above the BOJ’s 2% target.
The bank forecast core inflation to fall to 1.4% in 2024 and 1.3% in 2025.
The BOJ predicts Japan’s economy to grow by 2.4% this year, down from 2.9% in its previous forecast.