Bank of Japan expectedly retains its ultra-loose policy, cuts core inflation estimate

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Bank of Japan governor Kazuo Ueda gestures as he speaks during a press conference following a monetary policy meeting at the Bank of Japan's headquarters in Tokyo on July 28, 2023. The Bank of Japan on July 28 eased its grip on its ultra-loose monetary policy in a small step towards normalisation as inflation accelerates and the yen comes under pressure against other major currencies. (Photo by JIJI Press / AFP) / Japan OUT (Photo by STR/JIJI Press/AFP via Getty Images)

Str | Afp | Getty Images

The Bank of Japan expectedly retained its ultra-loose monetary policy at its first meeting this year, while cutting its core inflation forecast for the next fiscal year.

The BOJ decided unanimously to keep interest rates at -0.1%, and stuck to its yield curve control policy that keeps the upper limit for 10-year Japanese government bond yield at 1% as a reference, according toÂ a policy statementÂ released Tuesday.

All the economists surveyed by Reuters expected the Japanese central bank to maintain its negative rate policy this month â making the BOJ the world's only central bank with negative rates.

In a speech in December, Governor Kazuo Ueda had taken a dovish tone.

In its quarterly outlook on the Japanese economy, BOJ board members lowered their median forecast for core consumer price growth to 2.4% for fiscal 2024 starting this April, compared with 2.8% they estimated in October.

The central bank also marginally increased the core CPI inflation estimate for fiscal 2025 to 1.8% from 1.7% forecast earlier.

This is a developing story. Please check back for more updates.