The Bank of Japan kept its key short-term interest rate at -0.1% and maintained the target for the 10-year Japanese government bond yield at around 0% during its September meeting, by an 8-1 vote. The decision came hours after the US Federal Reserve pledged to hold interest rates near zero until at least 2023. On Wednesday, Yoshihide Suga was elected as Japan’s new prime minister in nearly eight years, replacing Sinzo Abe that abruptly resigned last month due to poor health. Japanese policymakers slightly upgraded their views on the economy, saying it remains in a severe state but has started to pick up as business activity gradually resume. In July, the central bank said the economy was an “extremely severe state.” Meantime, the yoy CPI (all items less fresh food) is likely to be negative for the time being, mainly affected by COVID-19 and the past drop in oil prices. Thereafter, It is expected to turn positive and rise gradually, as downward pressure is projected to wane gradually.