BOJ keeps policy steady, cuts inflation forecast

Tokyo: The Bank of Japan kept monetary policy steady on Wednesday and cut its price projections, bolstering market views it is in no position to rush an exit from its massive stimulus programme, despite the costs of prolonged easing.

In a widely expected move, the BOJ maintained its short-term interest rate target at minus 0.1 percent and a pledge to guide 10-year government bond yields around zero percent.

The central bank also left unchanged its forward guidance, adopted in July, that pledges to keep interest rates extremely low for an extended period.

The decision on maintaining its interest rate targets was made by a 7-2 vote with board members Goushi Kataoka and Yutaka Harada dissenting.

With stubbornly weak inflation forcing it to maintain its stimulus longer than expected, the BOJ took steps in July to make its policy framework sustainable such as by allowing bond yields to move more flexibly around its target.

BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision.