BOJ Keeps Monetary Policy Unchanged (UPDATE 1)

Jiji Press

12:02 JST, December 19, 2023 (updated at 12:30 JST)

TOKYO (Jiji Press)—The Bank of Japan decided to keep its monetary policy unchanged at a two-day Policy Board meeting that ended on Tuesday, forgoing for now a decision to end its negative interest rate policy.

The nine members of the board voted unanimously to keep intact the bank’s yield curve control program for guiding short- to long-term interest rates, the centerpiece of the monetary policy.

The short-term policy rate under the program was held steady at minus 0.1 pct. The rate is applied to part of the current account deposits held at the BOJ by commercial financial institutions.

The BOJ also maintained its policy of guiding 10-year Japanese government bond yields to around zero pct under the program while allowing the yields to rise above 1 pct to some extent as decided in the previous policy meeting in October.

Market players had speculated that the BOJ might scrap its negative interest rate policy soon, after Governor Kazuo Ueda told a parliamentary committee meeting Dec. 7 that “the year’s end to next year will be even more challenging.”