The Bank of Japan left its key short-term interest rate unchanged at -0.1% and maintained the target for the 10-year Japanese government bond yield at around 0% during its January meeting by a 7-1 vote. In a quarterly outlook report, the central bank revised higher its GDP growth projection for the next fiscal year beginning in April to a 3.9% growth from an estimate of 3.6% made in October, reflecting the effects of the government’s measures with the impact of COVID-19 gradually waning.

Meantime, the BoJ’s economic forecast for the current fiscal year was little changed (-5.5% vs -5.6% made in October). Meantime, the projected rates of rise in the CPI were more or less unchanged. The central bank reaffirmed it would not hesitate to take additional easing measures if necessary. In 2020, the BOJ eased monetary policy twice, mostly by expanding asset-buying and creating a new facility to deliver funds vis financial institutions to companies hit by coronavirus.