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Financial Times / Biz - Money

BoJ holds rates at March meeting

The Bank of Japan kept interest rates on hold on Friday as expected. 

The central bank kept overnight interest rates at minus 0.1 per cent and 10-year bond yields capped at about zero per cent.

In-line with previous outlooks the bank also said consumer inflation, ex-fresh food, would continue to rise, reaching its target 2 per cent level by 2019.

Marcel Thielant, senior Japan economist with Capital Economics said, however, the BoJ will continue to struggle to reach its 2 per cent inflation target. 

“Most analysts, ourselves included, expect inflation to remain well below the Bank’s 2% target both this year and next as the Bank hasn’t been able to lift inflation expectations among households and firms,” he said. “If the Bank decides to tighten policy it will because of concerns about financial stability rather than because of stronger price pressures.”