Japan’s central bank was one of the first among the major regulators to hold a monetary policy meeting. Following its results, the bank decided to stick to its ultra-easy monetary policy, keeping the key rate near zero.
The Bank of Japan's board members voted almost unanimously to keep the interest rate unchanged. Of the 9 voting members, only one dissented from the decision to maintain the dovish stance. However, it is necessary to evaluate every detail of such large scale meetings. Even 1 vote against keeping the key rate unchanged gives the market a hint about a possible change in the future.
In addition, the regulator is going to buy an unlimited number of government bonds, target the 10-year government bond yield at the level near zero, as well as to extend additional repurchase of commercial securities (CP) and corporate bonds. The regulator also states that the maximum volume of repurchases is about 20 trillion yen in total.
At the same time, the BOJ pointed out that "it will also closely monitor the impact of COVID-19 and not hesitate to take additional easing measures if necessary." In the short and long term, the central bank is likely to keep the key rate at the current or lower level. The regulator also lowered the forecast for the country's GDP growth in the current financial year to 3.8%. In April, the figure was projected to rise by 4%.
