Bank Of Japan Ramps Up Asset Buying To Help Support Economy Amid Coronavirus Outbreak
Japan's economic activity is likely to remain weak for the time being, mainly affected by the coronavirus outbreak," the statement read.
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The Bank of Japan said on Monday it will buy exchange-traded funds at double the current pace to about 112.55 billion dollars annually as part of the measures to help support the economy amid the coronavirus pandemic.
The decision was taken during a policy board meeting convened after the US Federal Reserve announced it will cut its target interest rate to near zero as part of the emergency action to support the US economy from the impact of coronavirus pandemic. Japan Times said the central bank left unchanged its minus 0.1 per cent short-term interest rate target and a pledge to guide long-term rates at around zero per cent.
In addition, it also decided to create a new loan programme to extend one-year, zero-rate loans to financial institutions. The move is aimed at boosting lending to firms hit by the virus outbreak.
"The BOJ will take additional monetary easing steps as needed without hesitation with a close eye on the impact from the coronavirus epidemic for the time being," the bank said in a statement.
Other measures in this regard include doubling the pace of purchases for Japanese real-estate trust funds to 1.68 billion dollars besides setting aside 18.7 billion dollars for additional purchases of commercial paper and corporate bonds in a bid to prevent credit markets from freezing up.
"Japan's economic activity is likely to remain weak for the time being, mainly affected by the coronavirus outbreak," the statement read. "Thereafter, it is expected to return to a moderate expansionary trend."