The Bank of Japan (BoJ) did not change its ultra-accommodating monetary policy on Wednesday, contrary to the expectations of some speculators, which immediately caused the yen to sink against the dollar and the euro.
The BoJ kept its negative short-term rate at -0.1% and did not raise the ceiling on Japanese 10-year bond yields that it tolerates, after surprisingly raising it to 0.5% last month. last year, which had revived speculation about an upcoming monetary tightening on its part.
The institution also revised its macroeconomic forecasts for Japan on Wednesday.
While it slightly raised its inflation forecast for the current financial year 2022/23 (which will end on March 31), to 3% against 2.9% previously, it has on the other hand left its outlook for 2023/24 unchanged. , 1.6%.
It also raised its inflation forecast for 2024/25 to 1.8% from 1.6% previously.
But these new forecasts remain below the objective reiterated on Wednesday by the BoJ to achieve a stable price increase of 2%, the raison d’être of its ultra-accommodative monetary policy for ten years.
These new prospects therefore do not change its view that the current acceleration of inflation in Japan should not last.
Because the rise in consumer prices in the Japanese archipelago was mainly stimulated last year by external factors: the soaring world prices of energy and food in the wake of the war in Ukraine and the sanctions against Russia, while prospects for growth and wage increases in Japan remain limited.
The BoJ has also revised its forecast for Japanese GDP growth slightly downward in 2022/23 (1.9% against 2% previously). It also lowered its forecasts for 2023/24 (1.7% against 1.9% previously) as for 2024/25 (1.1% against 1.5%).
On the foreign exchange market, the dollar jumped to 130.57 yen around 03:15 GMT against 128.5 yen before the BoJ’s announcements. The euro also strengthened significantly, around 141 yen against 138.5 yen before the BoJ.