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August 01, 2024BANK OF JAPAN MONETARY POLICY On July 31, 2024, the Policy Board of the Bank of Japan decided raise their uncollaterized overnight call rate to around 0.25%.
The Bank will reduce their purchases of Japanese government bonds so that it will be about 3 trillion yen in the first quarter of 2026. The Bank will also reduce Commercial Paper (CP) and corporate bonds and will discontinue the purchases in accordance with previous decisions. The current plan is to follow the March 2024 monetary policy meeting decisions.
Japan's economy has recovered moderately. Moderate growth in overseas economies has supported growth, to some extent, but exports remain flat. Exports and industrial production has remained flat. Business fixed investments improved moderately with improvements in corporate profits. There have been broad-based increases in wages. Consumer price index (all items less fresh food) has been in the range of 2.0%-2.5% as service prices have continued to rise reflecting wage increases. Expectations of inflation have risen moderately.
If the for the economic activity and prices presented in July Outlook Report is realized, the Bank will continue to raise the policy interest rate and adjust the degree of monetary accommodation. 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 September 20, 2024.
Source: Bank of Japan, Statement on Monetary Policy
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