Bank of Japan Adjusts Monetary Policy

Key Highlights

The Bank of Japan (BOJ) has implemented changes to its monetary policy, including:

• Abandoning its negative interest rate policy
• Raising the short-term interest rate target to 0-0.1%
• Applying a 0.1% interest to reserves held by financial institutions
• Monthly Japanese government bond (JGB) purchases set at 3 trillion yen

Policy Board Consensus

The BOJ policy board members reached a consensus on the new rate settings. Fourteen of 48 economists had predicted the 0.25% rate hike.

Aggressive Monetary Easing Rollback

These policy changes represent a significant shift from the BOJ's previous aggressive monetary easing stance. It marks the sharpest pull back in one of the most aggressive monetary easing exercises in recent history.