Bank of Japan Likely To Keep Low Rates

The Bank of Japan (BOJ) is widely expected to maintain ultralow rates at its first policy meeting of 2024, opting to gauge the strength of wage growth and the economic and financial impact of a deadly earthquake that struck central Japan three weeks ago, Kyodo News reported.

The BOJ is likely to maintain its policy, with cost-push factors, mainly blamed for the recent surge in prices, fading, and "shunto" wage negotiations between management and labor unions set to get underway this week.

The BOJ is likely to maintain its policy, with cost-push factors, mainly blamed for the recent surge in prices, fading, and "shunto" wage negotiations between management and labor unions set to get underway this week.

In its economic and price outlook report due out Tuesday, the central bank is expected to downgrade its inflation forecast for fiscal 2024 from the 2.8 percent projected earlier.

Japan's core consumer inflation rate remained above the BOJ's 2% target for the 21st month in December, keeping alive market expectations for a shift from the current ultraloose monetary policy framework, possibly this spring.

With the Policy Board likely to maintain short-term interest rates at minus 0.1% and continue allowing 10-year Japanese government bond yields to rise above 1.0%, financial markets are expected to scrutinize the central bank's assessment of wage growth.

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