The Bank of Japan kept its key interest rate unchanged after the end of a two-day meeting on Friday and raised inflation forecasts for the current and next financial years. The short-term interest rate on deposits of commercial banks has been left in the range from 0% to 0.1% per annum. Experts also predicted that the rate would remain at the same level. In March of this year, the Japanese Central Bank raised the rate for the first time since 2007, after it had been at a negative level since 2016. Last month, the regulator also abandoned targeting the yield of 10-year government bonds. On Friday, the regulator announced that it would continue to buy government and corporate bonds in accordance with earlier decisions. In March, he also announced the gradual cessation of purchases of corporate bonds during the year. The inflation forecast (consumer price index excluding fresh food) for fiscal year 2024 was raised to 2.8% from the projected 2.4% in January, and for fiscal year 2025 – to 1.9% from 1.8%. The forecast for fiscal year 2026 is 1.9%. Forecasts for the consumer price index excluding fresh food and energy for fiscal years 2024 and 2025 remained at 1.9%. The forecast for 2026 is 2.1%. The Bank of Japan also forecasts GDP growth in Japan by 0.8% in fiscal year 2024 (the previous forecast was +1.2%), by 1% in 2025 and also by 1% in 2026.
