Bank of Japan keeps ultra-low interest rates

ANKARA

The Bank of Japan on Friday kept its ultra-low interest rates, but raised its inflation forecast through 2024.

The BoJ held its key short-term interest rate unchanged at -0.1% and for 10-year bond yields around 0% at its October meeting, in line with market forecasts.

The Japanese yen stabilized on the day around 146.25 per dollar after falling 0.4% following the move. The yen rose 4% from last week’s 32-year low of 151.94.

"The Bank will continue with Quantitative and Qualitative Monetary Easing with Yield Curve Control, aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner," it said in a statement.

In its quarterly outlook report, the bank revised its inflation forecasts upwards by 0.6 percentage points to 2.9% for the year ending in March due to surging costs of energy, food, and durable goods.

Inflation is expected to ease to 1.6% over the next two years, below its inflation target of 2%.

The bank cut its gross domestic product (GDP) growth forecast for fiscal 2023 and 2024, to 2% and 1.9%, respectively.

According to data out earlier on Friday, consumer prices in Tokyo surged at the fastest pace since 1989 with 3.4% in October, higher than forecasts.