The Bank of Japan maintained its ultra-low interest rates and dovish stance on Friday, confirming its position as an exception among global central banks tightening monetary policy as recession concerns dim hopes for a strong recovery.

However, the central bank raised its price forecasts through 2024 and cautioned that risks were skewed to the upside, pointing to recent signs of rising inflationary pressure.

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“The labour market will continue to tighten and gradually strengthen wage pressure,” the BOJ said in a quarterly report.

“Accelerating underlying inflation is expected to heighten medium- and long-term inflation expectations and lead to sustained price rises accompanied by wage gains,” it said.

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As expected, the BOJ maintained its -0.1% short-term interest rate goal and pledged to keep the 10-year bond yield around 0%.

The Central bank also kept its dovish forecast, predicting that short- and long-term interest rates will stay at “present or lower levels.”

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In the aftermath of the central bank’s announcement, the yen slid roughly 0.4% to a session low of 146.90 per dollar but eventually recovered the losses to scrape out a slight gain. It was recently trading at 146.10 per dollar, up 0.13%.

Japan’s benchmark 10-year bond yield dropped to its lowest level in nearly four weeks following the BOJ’s policy decision.

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The BOJ increased its core consumer inflation prediction for the year ending in March 2023 from a July estimate of 2.3% to 2.9% in the latest forecast, above its 2% target.

It also raised its inflation forecast for fiscal 2023 and 2024 to 1.6%, pointing to recent indications that businesses are aggressively passing on higher raw material costs to consumers.

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However, in response to global recession worries, the BOJ reduced its economic growth predictions for fiscal 2022 and 2023.

The declaration followed the European Central Bank’s move to hike interest rates again on Thursday, maintaining its attempts to prevent excessive price growth from becoming entrenched. The Federal Reserve of the United States is also likely to raise interest rates next week.

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Despite being lower than in other major countries, Japan’s core consumer inflation reached an eight-year high of 3% in September, surpassing the BOJ’s 2% goal for the sixth consecutive month.