BOJ keeps short, longterm rate targets unchanged
Board revises up inflation forecasts for 2023, 2024
Governor Ueda expected to brief media on decision 0630 GMT

TOKYO, Oct 31 Reuters The Bank of Japan further loosened its grip on longterm interest rates by tweaking its bond yield control policy again on Tuesday, taking another small step towards dismantling the past decade39;s massive monetary stimulus.

The ninemember board also revised up its price forecasts to project inflation well exceeding its 2 target this year and next, underscoring a growing conviction that conditions for phasing out ultraloose monetary policy are falling into place.

But the yen tumbled against the dollar after the decision as traders focused on the BOJ39;s dovish pledge to patiently maintain its extremely accommodative policy and forecast for inflation to slow back below 2 in 2025.

It looks like the BOJ is taking the 39;softly, softly39; approach here, said Kyle Rodda, senior financial market analyst at Capital.com in Melbourne. The incrementalism was perhaps a surprise to markets given the speculation of an actual tweak.

As widely expected, the BOJ maintained its 0.1 target for shortterm interest rates and that for the 10year government bond yield around 0 set under yield curve control YCC.

But the BOJ redefined 1.0 as a loose upper bound rather than a rigid cap and removed a pledge to defend the level with offers to buy unlimited amount of bonds.

Given extremely high uncertainties…