The Bank of Japan maintained its ultra-loose monetary policy, as widely expected, and lowered its inflation forecast.
The Policy Board of the BoJ, on Tuesday, voted 7-2 to maintain interest rate at -0.1 percent on current accounts that financial institutions maintain at the bank.
The bank said it will purchase government bonds so that the yield of 10-year JGBs will remain at around zero percent.
Further, the bank will purchase JGBs in a flexible manner so that their outstanding amount will increase at an annual pace of about JPY 80 trillion.
The bank said inflation is likely to increase gradually towards 2 percent, mainly on the back of the output gap remaining positive and medium-to long-term inflation expectations rising.
The bank lowered its inflation forecast for fiscal 2019 to 1 percent from 1.1 percent. The projection for the fiscal 2020 was downgraded to 1.3 percent from 1.4 percent.
The bank also downgraded its growth outlook for the fiscal 2019 to 0.7 percent from 0.8 percent but retained its projection for the fiscal 2020 at 0.9 percent.
The bank forecast the economy to expand 1.1 percent in fiscal 2021 and inflation at 1.6 percent.
The material has been provided by InstaForex Company – www.instaforex.com