BOJ Decides 1st Monetary Easing since 2016 amid Viral Scare

Politics

Tokyo, March 16 (Jiji Press)--The Bank of Japan at a policy-setting meeting on Monday decided monetary easing for the first time in about three and a half years, to deal with the economic impact of the global pandemic of the novel coronavirus in a concerted manner with the U.S. and European central banks.

"Our latest decision on additional easing was made under the framework of international cooperation" for the fight against the new coronavirus, BOJ Governor Haruhiko Kuroda told a press conference after the one-day meeting. The Japanese central bank moved up the policy meeting, which was initially scheduled to take place for two days from Wednesday. The BOJ will "consider further easing steps" if downward pressure on the economy and prices is observed in Japan, he said.

At the day's meeting, the BOJ Policy Board decided by a unanimous vote to double its annual purchases of exchange-traded funds and Japan real estate investment trusts, or J-REITs, to 12 trillion yen and 180 billion yen, respectively, and raise the upper limit on its purchases of commercial paper and corporate bonds by 2 trillion yen.

The board also unanimously voted to introduce new money market operations to facilitate corporate financing. Under the special operations, to be in place until the end of September, the BOJ will extend loans of up to one year at an interest rate of zero pct to private-sector financial institutions that support the financing of small companies.

Meanwhile, the BOJ board decided by a vote of seven to two to maintain its yield curve control policy, with the short-term policy rate at minus 0.1 pct, stopping short of lowering the rate further into negative territory, and the long-term rate target around zero pct.

[Copyright The Jiji Press, Ltd.]

Jiji Press