The Bank of Japan maintained its massive monetary stimulus and announced the introduction of a new funding programme to support the efforts on climate change issues and also extended the deadline for Covid support programme. <\/p>\n
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.<\/p>\n
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.<\/p>\n
Tom Learmouth, an economist at Capital Economics, expects the BoJ to leave both its policy rate and target for 10-year government bond yields unchanged for the foreseeable future.<\/p>\n
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.<\/p>\n
The deadline for new loan application will end on March 2022 instead of September 2021. <\/p>\n
Further, the BoJ 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. <\/p>\n
The bank plans to launch the new measure likely within 2021. The preliminary outline of the measure will be unveiled at the July monetary policy meeting. <\/p>\n
This new measure will be a successor to the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth, BoJ said. <\/p>\n