Bank of Japan keeps interest rates unchanged

The Bank of Japan left monetary policy unchanged, expects higher inflation in 2024. The Bank of Japan (BOJ) left its policy rate unchanged after its monetary policy meeting on Friday, keeping its benchmark policy rate between 0% and 0.1%. That’s in line with economists’ expectations. The move was expected but came after Tokyo reported lower-than-expected April inflation; the core inflation rate was 1.6%, compared with economists’ expectations of 2.2%. The BOJ also said it would continue buying bonds in line with its March decision. The BOJ made no comment on the yen. The currency surpassed 156 points against the dollar on Friday following the decision and was last traded at 156.11. Inflation forecast updated In a separate development, the central bank also released its second-quarter outlook for Japan’s economy and raised its inflation outlook for fiscal 2024. The Bank of Japan raised its core inflation forecast to 2.8% from 2.4%. The Bank of Japan revised its growth forecast for this year to 0.8% from 1.2%, the bank said, adding that inflation is expected to slow to "around 2%" in fiscal 2025 and 2026.