BOJ Holds Policy Rate at 0.5%, Two Dissent
The Bank of Japan decided, by a vote of 7 to 2, to keep the guideline for the uncollateralized overnight call rate at around 0.5%. 12
Members Takada and Tamura dissented and proposed raising the rate to around 0.75%; the proposal was rejected by a majority. 12
The Outlook Report says growth will stagnate for a time as overseas economies slow under the effects of trade policies, then pick up. The growth outlook is largely unchanged from the previous report. 12
Core CPI inflation is projected to narrow to below 2% by the first half of next fiscal year as the effect of higher food prices such as rice fades. It is expected to rise gradually thereafter and be broadly consistent with the price stability target in the latter half of the projection period. 12
The governor said that, if the outlook is realized, the Bank will continue raising the policy rate in line with improvement in economic activity and prices. He noted that real interest rates are currently at extremely low levels. 1