The  BoJ  maintained  short-term interest rates at  -0.1%  and kept yield curve control parameters  unchanged after  a two-day meeting, according to  a  statement  released on  Tuesday.  

 The Bank of Japan kept  monetary policy  steady and adjusted  economic  forecasts without providing  clear  guidance on a timetable  for  ending  negative interest  rates, pushing  the yen  lower.  

 The  BoJ  maintained  short-term interest rates at  -0.1%  and kept yield curve control parameters  unchanged after  a two-day meeting, according to  a  statement  released on  Tuesday. 

 The bank  lowered  its inflation forecast for the  April  fiscal year  to 2.4% from 2.8% in  its  quarterly outlook report.  This  implies  that  price  increases  will continue to exceed  the  2% target for some time, as has been the case since April 2022.  This political  decision was unanimously expected by  BoJ observers when interviewed  by Bloomberg. A major earthquake on New  Year’s  Day and a deepening  financial  scandal  within  Prime Minister Fumio  Kishida’s  ruling party made this  the wrong  time for  Japan’s  first  interest  rate hike since  then. since  2007.  The  Reserve and European Central Bank  hinted  at  cutting interest rates  later this year.  

 The yen weakened against the dollar immediately after the announcement, briefly  reaching  148.55 per  dollar,  as market  participants expected  the  rate to remain  negative  for some time.  

 The  decision  to hold  is unlikely to change the  widespread  view among economists that the  BoJ  will raise  interest  rates at some point this year. The BOJ said the  level of  certainty  in achieving the interest rate  target  continues  to  increase gradually, showing  that the bank is  increasingly  confident  in  achieving  the target  and is still on track  to raise interest rates.  

  Economists surveyed  see April as the most  favorable time to  end  negative  interest rates,  as  this would give  the central bank  time  to  evaluate  the results of annual  wage  negotiations. Higher  increases  are seen as  key  in ensuring  a positive cycle of  price  and  wage growth drives  economic growth. 

  Ahead of Tuesday’s meeting,  people familiar with the matter said  BoJ  officials  believed  their price  forecast – of about  2% or  more – was  high enough to justify ending  negative  interest rates  and  now  they are focusing  on whether  certainty  about  the outlook  has increased. enough.  

  Gov.  Kazuo Ueda will speak to reporters in the afternoon,  possibly starting at  3:30 p.m. 

 The recent  weakness in  the yen will  likely cause  Ueda to avoid  appearing  too dovish. The yen around 150  is keeping  import costs high and  adding  to  inflationary pressures, raising the risk of another blow to already  weak  consumer spending. 

 Households  facing  rising  living  costs  are  growing impatient with  widespread and  prolonged  monetary easing as  the  key price  gauge remains  above the  BOJ’s  2% target. 

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