The Bank of Japan changed its monetary framework on 19 March 2024, concluding that its negative interest rate policy and yield curve control had served their purposes. The decision followed an assessment that a more durable relationship between wages and prices was emerging.
The bank set an operating guideline to keep the uncollateralised overnight call rate around 0% to 0.1%. Short-term interest rates would become its primary policy instrument. The new market-operation guideline and interest on qualifying current-account balances were to take effect on 21 March.
The change did not immediately end government bond purchases. The bank said it would maintain broadly the previous purchase amount and respond if longer-term yields rose rapidly. It discontinued purchases of exchange-traded funds and Japanese property investment trusts, while planning to phase out corporate bond and commercial paper purchases.
Officials still anticipated supportive financial conditions for the time being. This account preserves the March 2024 decision and its stated reasoning. It should not be interpreted as the Bank of Japan’s current interest rate, asset-purchase schedule or present policy guidance.