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November 04, 2024BANK OF JAPAN MONETARY POLICY On October 31, 2024, the Policy Board of the Bank of Japan decided to maintain their uncollateralized overnight call rate around 0.25%.
The Bank of Japan projects the economy to keep growing at a pace above the potential growth rate. The growth is supported by government’s economic measures and with overseas economies continuing to grow and supporting an increase in an export of goods in the second half of 2024. 2025 and 2026 economic growth is supported by domestic and external demand rising.
Annual inflation is projected to be 2.5% for 2024 and then around 2% for 2025 and 2026. It is expected that government measures will make a positive contribution on pushing down inflation, while a recent decline in the crude oil and other resource prices will make a negative contribution.
The risk to the monetary policy would come from the overseas economies, particularly from US and developments in financial and capital markets. Firm’s behavior has also shifted towards raising wages and prices with exchange rate developments more likely to affect prices.
With the price stability target of 2%, it will conduct monetary policy as appropriate, in response to developments in economic activity and prices as well as financial conditions, from the perspective of sustainable and stable achievement of the target.
The Bank will release their next monetary policy statement on December 19, 2024.
Source: Bank of Japan, Statement on Monetary Policy; Outlook of Economic Activity and Prices
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