BOJ holds policy rate at 0.75% by 8-1 vote
The Bank of Japan decided to keep the uncollateralized overnight call rate at around 0.75%, with eight in favor and one against. 1
Board member Takata proposed raising the policy rate to around 1.0%, arguing that the price stability target was largely achieved and that upside risks to domestic prices were high; the proposal was rejected by a majority. 1
Japan's economy is assessed as recovering moderately despite some weak movements. Core CPI inflation, which had been above 2%, has fallen to around 2% owing to government energy-cost relief measures and other factors. 12
The Bank noted that tensions in the Middle East have unsettled international financial markets and sharply raised oil prices, and listed them among the risk factors to be watched closely. 12
The Bank said that, if its outlook materializes, it will continue to raise the policy rate in line with improvements in economic and price conditions, given that real interest rates are extremely low. 12
The summary of opinions noted that many large firms replied to union demands in spring wage talks in full or close to full, and that the main scenario for the economy and prices did not need to be changed. 1