The Wall Street Journal: Bank of Japan vows to keep rates very low for an ‘extended period’

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TOKYO — The Bank of Japan reiterated Wednesday that it would keep interest rates extremely low “for an extended period,” holding to forward guidance it first introduced in July.

The BOJ decided to stand pat on policy after making a number of tweaks in July to prepare for a longer-than-expected fight to lift inflation.

The board voted 7-2 to maintain shorter-term interest rates at minus 0.1% and keep the target for the 10-year Japanese government bond yield at around zero. It repeated a promise introduced in July to allow the bond yield to move in a more flexible manner, with the goal of reviving the moribund government bond market.

Gov. Haruhiko Kuroda has said the bank would tolerate a rise in the yield to about 0.2% after previously setting an informal cap of about 0.1%.

An expanded version of this report appears on WSJ.com.

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