TOKYO – The Bank of Japan raised its inflation forecasts on Friday but maintained ultra-low interest rates, remaining a dovish outlier among a global wave of central banks tightening monetary policy.
As widely expected, the BOJ kept unchanged its -0.1 percent target for short-term interest rates, and 0 percent for the 10-year government bond yield by a unanimous vote.
It also maintained its dovish policy guidance that pledges to ramp up stimulus as needed, and projecting that short- and long-term interest rates will move at “current or lower levels.”
In a quarterly review of its projections released on Friday, the central bank said it expects core consumer inflation to hit 2.9 percent in the current fiscal year ending in March 2023 and 1.6 percent the following year. It projects inflation to hit 1.6 percent in fiscal 2024.