TOKYO (Kyodo) -- The Bank of Japan maintained Friday its aggressive monetary easing steps as widely expected, signaling its resolve to get inflation toward its 2 percent target as the economy continues to expand.
BOJ policy board members decided to keep the existing framework of yield curve control -- consisting of a short-term policy interest rate of minus 0.1 percent and government bond purchases aimed at guiding the 10-year yield to around zero percent.
At a two-day policy-setting meeting, the BOJ kept a pledge to purchase government bonds at a pace that will increase its holdings by an annual 80 trillion yen. It will keep up purchases of exchange-traded funds and other risky assets.
Japan has seen the longest growth run in 28 years and a tight labor market that economists say should accelerate wage growth. But inflation remains subdued despite five years of reflationary policy, with core consumer prices up 0.9 percent in January.
Financial markets are expected to scrutinize what Governor Haruhiko Kuroda has to say about the decision at a press conference later in the day.
Kuroda, nominated for another five-year term, said last week it would be natural to debate an exit from aggressive monetary easing around fiscal 2019 if inflation reaches its 2 percent target.
His comments temporarily sent the yen and bond yields higher, a sign that financial markets have been sensitive about when and how the BOJ, seen as lagging behind its U.S. and European peers, will normalize policy.
Kuroda stressed the need for powerful monetary easing until the target is met, trying to tamp down market speculation of a near-term policy change as the BOJ chief attended his confirmation hearing this week.
It was the last policy-setting meeting for deputy governors Hiroshi Nakaso and Kikuo Iwata, whose current terms end on March 19.