The Bank of Japan (BOJ) announced no changes to its monetary policy settings yet again in September but released the details of its scheme for combating climate change.
Key takeaways
Maintains short-term interest rate target at -0.1%.
BOJ maintains 10-year JGB yield target around 0%.
BOJ made decision on yield curve control by 8-1 vote.
BOJ board member Kataoka dissented on yield curve control decision.
Japan's economy remains in a severe state but picking up as a trend.
Cuts assessment on output.
Cuts assessment on exports.
Japan's economy likely to recover as impact of pandemic gradually subsides.
Export, output continue to rise though temporarily affected by supply constraints.
Overseas economy recovering as a whole.
Capex picking up although some sectors seeing weaknesses.
Consumption continues to stagnate.
Market reaction
USD/JPY keep its recovery momentum intact below 109.50 on the BOJ’s status-quo. The spot was last seen changing hands at 109.42, up 0.20% on the day, having hit weekly lows at 109.12 in early trades.
