BoJ Holds Ultra-Low Interest Rates, Raises 2022 Inflation Forecast2 min read
The Bank of Japan (BoJ) held interest rates at record lows as expected on Friday, and said inflation is likely to rise more in the near-term as the Japanese economy struggles with elevated raw material costs and supply chain issues The central bank held its target for short-term interest rates at negative 0.1%, and said in a statement that it will continue to guide the 10-year bond yield at 0%.The central bank now expects CPI inflation to end the year at 3%, higher than its previous forecast of 2.3%. But it also expects inflation to ease to around 1.5% in 2023 and 2024 Japan’s CPI inflation hit an eight-year high of 3% in September, trending above the BoJ’s target 2% range for a fifth consecutive month amid rising fuel and food prices. Rising raw material prices also saw local businesses pass on the costs to customers Data released earlier on Friday showed that inflation in Tokyo hit a 33-year high of 3.4% in October. The figure acts as a precursor to the nationwide inflation reading for the month.