The Bank of Japan on Tuesday decided to retain its target of doubling the monetary base in two years, but stopped short of announcing any new steps to curb bond market volatility. Meanwhile, the central bank upgraded its view of the economy.
The BoJ said its money market operations will continue to target an expansion of monetary base at an annual pace of JPY 60-70 trillion, as announced in April. The decision to keep the easing plan intact was unanimous.
Japan's economy has been picking up, the central bank said today, upgrading its assessment from May when it said "the economy has started to pick up". The view on exports was also raised, with the central bank stating that exports have started picking up.
"As for overseas economies, while the manufacturing sector continues to show a lackluster performance, they are gradually heading toward a pick-up as a whole," the bank said. The bank saw investment, consumption and exports all showing an upward trend. Industrial production has also been picking up, it added.
The BoJ expects the economy to return to a moderate recovery path, as domestic demand recovers helped by the bank's monetary easing as well as various economic measures and as the growth rates of overseas economies gradually pick up.
The bank forecasts the year-on-year rate of change of the consumer price index to gradually turn positive. The BoJ aims to achieve 2 percent inflation in two years.
At the meeting, board member Takahide Kiuchi once again raised objection to the central bank's two-year time frame to achieve the 2 percent inflation target.
Kiuchi proposed that the bank should aim to achieve the price stability target "in the medium to long term" and "designate quantitative and qualitative monetary easing as an intensive measure with a time frame of about two years." This proposal was defeated by 8-1 in the nine-member board.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.