The Bank of Japan (BOJ) kept its monetary policy settings unchanged following the conclusion of its two-day monetary policy review meeting on Friday.
The central bank kept the benchmark policy rate on hold at -10bps while maintaining its pledge to buy J-REITS at an annual pace of up to JPY180 bln.
The BOJ, as widely expected, extended a deadline for its pandemic-relief programme beyond September by six months, in a continued effort to stimulate the fragile economy and tepid inflation.
Statement summary
“Japan’s economy remains in a severe state but picking up as a trend.”
“Japan’s economy likely to recover although activity remains low compared with pre-pandemic levels.”
“Exports, output increasing steadily.”
“Revises down an assessment on consumption.”
“Consumption stagnating.”
“Decision on extending pandemic-relief programme made by 8-1 vote.”
“Climate change has a very large impact on the economy, price, financial developments in medium- to long-term.”
“Will introduce a new scheme to back-finance climate change loans, investment.”
“Will release outline of new climate change scheme at July policy meeting.”
“Amendment to “principal terms and conditions of the special funds-supplying operations to facilitate financing in response to the novel coronavirus (COVID-19)”
Market reaction
With the initial market reaction, USD/JPY was little change, holding its range around 110.20.