BOJ maintains key policy of increasing monetary base by Y60-70T per year
TOKYO (Dow Jones) --The Bank of Japan stood pat on its monetary policy Wednesday, signaling confidence that consumer prices are on track to hit the central bank's inflation target.
After wrapping up their one-day policy meeting, the BOJ's nine board members unanimously decided to maintain the amount of money the central bank pumps into the economy at Y60 trillion-Y70 trillion a year.
The lack of action wasn't a surprise, as many economists expect fresh action to take place in July or later when the impact of a sales tax increase on the economy and prices becomes clearer.
So far, the BOJ has viewed the effects of the higher levy that took effect earlier this month as being within their expectations, even though it is still early to grasp the full impact that could last into next month.
The market's focus is now turning to the central bank's semiannual forecast on growth and prices to be released at 0600 GMT and Gov. Haruhiko Kuroda's news conference from 0630 GMT.
A raising of the BOJ's forecasts could further damp expectations for early moves by the central bank to ramp up stimulus efforts following recent remarks by BOJ Gov. Haruhiko Kuroda ruling out imminent new measures. Mr. Kuroda's remarks earlier this month led to a slide in Tokyo share prices and a rise in the yen.
Covering the next three years, the central bank will unveil for the first time its outlook for the business year ending March 2017.
Many economists expect the BOJ's projections to sketch out a path toward 2% inflation. In its latest interim updated projection in January, the board sees the consumer price index rising 1.3% for the current business year started April and 1.9% for the following year. All those figures exclude the effects of the recent rise in sales tax and another possible tax increase that Prime Minister Shinzo Abe will decide upon later this year.
Since the central bank rolled out its large-scale easing campaign a year ago to squeeze out years of price declines, Mr. Kuroda has maintained he is confident of hitting the 2.0% inflation target in about two years.