BOJ keeps policy steady in September, upgrades economic assessment

The Bank of Japan (BOJ) board members decided to keep rates unchanged at -10bps while maintaining a 10yr JGB yield target at 0.00% after concluding its two-day September monetary policy review meeting on Thursday.

Statement summary

BOJ’s decision on yield curve control made by 8-1 vote.

BOJ board member Kataoka opposes decision on yield curve control.

BOJ revises up economic assessment.

BOJ revises up assessment on exports.

BOJ revises up assessment on output.

Japan’s economy remains in severe state but appears to pick up.

Exports, output are picking up.

Capex is falling as a trend as corporate profits, business sentiment worsening.

Consumption gradually picking up as a whole.

Japan’s economy expected to improve as a trend due to easy monetary conditions, effect of govt stimulus steps.

Japan’s CPI likely to hover in negative territory for time being.

Must watch whether financial intermediation is functioning smoothly, financial system stability is maintained.

Market reaction 

USD/JPY shows little reaction on the BOJ announcement, keeping its range just above 105.00.