The Bank of Japan kept its key short-term interest rate unchanged at around 0% to 0.1% at its April meeting, as widely expected, after delivering the first rate hike since 2007 and ending its eight years of negative rates in March. The central bank also said it will continue to conduct bond purchases, in line with the March decision. Friday’s statement scrapped a reference that the BoJ had purchased about JPY 6 trillion per month in the past. In a quarterly outlook, the committee revised higher CPI prints for FY 2024 to 2.8% from January’s projections of 2.4%, due to the waning effects of higher import prices and fewer government support measures. For 2025, the board expects core inflation to hit 1.9%, slightly higher than its earlier estimates of 1.8%, reflecting a recent rise in oil prices. On the GDP front, policymakers cut their 2023 growth forecast to 1.3% from 1.8%. For FY 2024, the bank also slashed its GDP outlook to 0.8% from 1.2%, mainly reflecting lower private consumption.
