On December 19, 2023, the Bank of Japan headquarters (upper C) is located in Tokyo.
Kazuhiro Nogi | AFP | Getty Images
The Bank of Japan has raised its benchmark interest rate to “around 0.25%” from the previous range of 0% to 0.1% and outlined plans to scale back its bond-buying program.
But the Bank of Japan said it expected real interest rates to remain “significantly negative”, adding that “accommodative financial conditions will continue to firmly support economic activity”.
The central bank predicts that by the end of fiscal 2024, the core inflation rate excluding fresh food prices will reach 2.5%, and will reach “around 2%” in fiscal years 2025 and 2026.
The Bank of Japan said it would continue to raise policy rates and adjust monetary easing, assuming its economic outlook materializes.
Japan’s fiscal year runs from April 1 to March 31, which means fiscal year 2024 will end in March 2025.
The Bank of Japan said it would reduce monthly direct purchases of Japanese government bonds to about 3 trillion yen per month in the January-March 2026 quarter.
The Bank of Japan added that it would cut about 400 billion yen per quarter, which would Reduce total holdings of Japanese government bonds About 7% to 8%. this Japanese government bonds held by the Bank of Japan According to CNBC calculations, as of July 19, Japan’s economic size is currently as high as 579 trillion yen.
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