TOKYO (Reuters) – The Bank of Japan kept monetary policy steady and nudged up its economic growth forecasts on Tuesday, as the government’s spending package and receding pessimism over the global outlook take some pressure off the central bank to top up stimulus.
As widely expected, the BOJ maintained its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%, by a 7-2 vote.
It also maintained guidance that commits it to keeping rates at current low levels, or even cut them, until risks keeping it from achieving its 2% inflation goal subside.
In a quarterly review of its forecasts, the BOJ revised up its growth projection for the fiscal year beginning in April to 0.9% from an estimate of 0.7% growth made in October, helped by a boost from the government’s fiscal stimulus package.
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