The BOJ also kept its ultra-loose interest rate intact and revised core consumer inflation forecast upward for the current fiscal year.
Nikkei report
"The bond market is pretty stable now and we saw uncertainty over the outlook very high. This was a good timing to make tweaks to our policy framework," Ueda said at the same press conference. With the spike in commodity prices last year, the BOJ was forced to defend its yield limit with more bond purchases. This led to accusations the central bank was distorting the pricing mechanism in the market, which led to yen weakness that in turn inflated the cost of raw materials imports even further.
If the economy enters a recession in the second half of the year as we anticipate, the case for policy tightening will diminish., the bank said it expects the Japanese economy to grow above its projected potential, given the virtuous cycle that is emerging from higher income that has partly led to an improvement in consumer sentiment and consequently, increased spending.
refers to the difference between an economy's actual output and its potential output at full capacity.Charly Triballeau | Afp | Getty Images
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