The Bank of Japan rejects an interest rate hike.
The Bank of Japan is not going to give a turn to its monetary policy for the moment, despite the fact that its December decision, by which it is allowing the Japanese decade bond to reach a higher yield, had encouraged expectations approaching a rise in interest rates.
The Bank of Japan decided yesterday to keep its monetary and stimulus policy unchanged, after having revised downward its growth projections for the coming years. In this way, the entity chaired by Haruhiko Kuroda leaves the country's interest rates unchanged at -0.1%, the same rate that it has been maintaining since January 2016, when it entered negative territory for the first time in his story.
The Bank of Japan is in fact the only central bank of a developed economy that has resisted raising rates in the face of escalating inflation.
The Bank of Japan will continue to apply its government bond yield curve control policy by allowing the 10-year bond yield to fluctuate in a range of around 0.5 percentage point from the target level and will continue its large-scale sovereign bond purchases.
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