This comes after Japan’s central bank left key interest rates unchanged at the end of today’s monetary policy meeting. The Bank of Japan also presented new forecasts, according to which inflation in the country will remain close to the 2 percent target over the next three years, world agencies reported.
The central bank left its short-term interest rates at the level reached – in the range of 0 to 0.1 percent.
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In March, the bank raised rates for the first time in 17 years and described its goal of achieving stable inflation at 2 percent as “seeable.”
Inflation
As the cycle of wage growth and price increases intensifies, inflation is likely to gradually pick up, according to the bank’s new forecasts, which say inflation is likely to be “at a level that is broadly in line” with the 2 percent target by the end of FY2026.
Governor Kazuo Ueda said last week that if core inflation picks up, it is “very likely” the bank will raise interest rates.
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In addition, the Bank of Japan believes that the impact of exchange rate movements on inflation requires “due consideration”.
The yen’s sharp decline against the dollar has become a source of concern for Japan as it raises import costs and accelerates inflation in the resource-poor country.
