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Japan Policy Rate 0.0% (consensus 0.0%) in Mar-24

• The Bank of Japan has raised its policy rate to 0.0%, ending the negative interest rate policy in anticipation of achieving its 2% price stability target sustainably.
• This policy shift reflects the BOJ's confidence in Japan's economic recovery, underpinned by improved corporate profits, likely continued wage increases, and the formation of a more solid virtuous cycle between wages and prices.
• Future BOJ policy decisions will hinge on economic activity and price developments, global economic conditions, and the trajectory of inflation expectations and wage growth, with a continued focus on achieving sustainable price stability.

Japan CPI 2.2% y-o-y in Jan-24

- Japan's Consumer Price Index (CPI) grew at a slower rate of 2.2% year-on-year in January 2024, marking the lowest growth since March 2022.
- Excluding fresh food, Japan's CPI rate was 0.2 percentage points above consensus expectations at 2.0% year-on-year.

Japan Policy Rate -0.1% (consensus -0.1%) in Jan-24

• The Bank of Japan maintains its policy rate at -0.1%, in line with consensus forecasts, and continues its yield curve control strategy, balancing the stimulation of economic activity and the management of inflationary pressures in light of a moderate economic recovery.
• Influencing factors for future interest rate policies include global economic conditions, inflation and wage dynamics, aiming to achieve a sustainable 2% inflation target while balancing economic stimulus and inflation control.
• The BOJ's approach indicates a tendency to maintain lower interest rates, adjusting cautiously in response to domestic and global economic indicators, market stability, and inflation trends.

Japan CPI 2.6% y-o-y in Dec-23

- Japan's CPI grew by 2.6% year-on-year in December 2023, the lowest growth rate since June 2022, indicating a slowdown in overall inflation.
- The CPI-X Fresh Food also slowed, reaching 2.3% year-on-year as expected, but still suggesting that underlying inflationary pressures persist.