Bank Of Japan Maintains Monetary Policy

The Bank of Japan maintained its massive monetary stimulus, as widely expected, and extended the duration of the special funding programme to help pandemic-hit firms.

The board, governed by Haruhiko Kuroda, on Tuesday, voted 7-1, with 1 abstention, to hold the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

The bank will continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.

The Bank decided by an 8-0 majority vote, with 1 abstention, to extend the duration of the Special Program to Support Financing in Response to the Novel Coronavirus by six months until the end of March 2022 with a view to continuing to support financing, mainly of firms.

Further, the Bank judged it appropriate to introduce a new fund-provisioning measure, through which it provides funds to financial institutions for investment or loans that they make to address climate change issues. The bank plans to launch the new measure likely within 2021.

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