The Bank of Japan today said it will keep key interest rate to 0.1%, which was set back in December, as well as extend its program of buying debt from the markets, highlighting the weakness that still exists in the market. Intended for the liquidity measure to end by September 30, it was moved to the end of the year. The institution however reduced its forecast for the economy from the figure it came out with back in April. Part of its report states the following, via WSJ:
The board’s median forecast for real gross domestic product for next fiscal year was cut to a 3.4% drop, compared with the 3.1% contraction forecast in April. The projection for the core consumer price index was upgraded to a 1.3% decrease from a 1.5% fall.
The news also contributed to dropping yields for Japanese notes.