BOJ signals prolonged easing, cuts price outlook as new COVID pain hits
Japan's central bank maintained its massive stimulus on Tuesday and projected inflation missing its 2% target for years to come, as fresh curbs to combat a spike in COVID-19 cases overshadow the boost to growth from solid global demand.
The Bank of Japan also warned of "high uncertainty" on how much the pandemic could drag on growth, signalling its readiness to keep its money spigot wide open for the foreseeable future.
Japan last week declared a third, two-week state of emergency for Tokyo, Osaka and two other prefectures to contain the pandemic, clouding prospects for a fragile economic recovery.
In a quarterly report released after Tuesday's rate review, the BOJ slightly revised up its growth forecast and stuck to its view the world's third-largest economy would recover as robust U.S. and Chinese demand underpins exports.
But the bank cut this year's price forecast and predicted for the first time that inflation would stay well short of its 2% target beyond Governor Haruhiko Kuroda's term, which ends in early 2023.
As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and that for 10-year bond yields around 0%.
Markets are focusing on Kuroda's post-meeting briefing for his views on how the new state of emergency curbs could affect Japan's economy and the price outlook.
Reference: CNBC
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