The Bank of Japan (BoJ) kept the policy rate constant at 0.75 percent, within expectations.
According to the BoJ statement, the bank kept the policy rate constant at 0.75 percent, in line with expectations, after the two-day monetary policy meeting. While the decision was taken with a vote of 8 to 1, BoJ member Hajime Takata voted for the interest rate increase.
Hajime assessed that the price stability target has almost been achieved and that price risks in Japan are on the upside due to the second-round effects of price increases resulting from overseas developments.
The statement emphasized the tension in the Middle East and stated that the effect of the increase in oil prices on core inflation should be carefully monitored.
It was stated in the statement that the Japanese economy, although partially weak, recorded a moderate recovery, and that exports and industrial production generally followed a stable course.
In the statement, it was underlined that there were downward effects arising from customs duties in the manufacturing sector, and it was stated that private consumption remained resilient due to the improvement in employment and income, but was affected by price increases.
On the other hand, the statement noted that global financial markets fluctuated and oil prices increased significantly as tensions in the Middle East increased, and these developments were closely monitored.
In the statement, it was stated that the annual increase rate of the Consumer Price Index (CPI) (excluding fresh food) is expected to temporarily fall below 2 percent due to the decrease in the effect of the increase in food prices and government measures.
It was stated in the statement that upward pressure is expected to arise again in the coming period due to the recent increase in oil prices, and said, “The Bank will carry out its monetary policy with a price stability target of 2 percent, in line with the developments in economic activity and prices, as well as financial conditions, from the perspective of achieving the target in a sustainable and stable manner.” statements were included.
