Bank of Japan
The Bank of Japan decided on Tuesday morning, in the last meeting of its Monetary Policy Committee for this year, to keep the interest rate unchanged at the level of -0.1%, by consensus of the members of the committee, and the following points were the highlights of the interest statement issued by the Bank of Japan:
- The Bank of Japan decided on its monetary policy settings by unanimous vote.
- Government bond yield curve control will be reviewed.
- The Bank of Japan noticed a slowdown in the Japanese market activity, which necessitated maintaining its accommodative policy.
- The Bank of Japan will sharply increase the purchase amount of Japanese government bonds.
- The Bank of Japan expects both short- and long-term interest rates to remain at current levels or even lower, if necessary.
- The Bank of Japan will not hesitate to take additional steps towards further easing of its monetary policy, as needed, while focusing on the impact of the epidemic on the economy..
- The Bank of Japan will revise its control of the government bond yield curve.
- The Bank of Japan will aim to achieve the goal of inflation and price stability by enhancing the sustainability of monetary easing by supporting the recovery of the Japanese economy and raising inflation expectations..
- The Bank of Japan expects the economy to recover as the impact of the pandemic and supply constraints ease.
- The Bank of Japan will keep a watch on financial movements and the foreign exchange market and its impact on the Japanese economy and prices.
- The Bank of Japan will widen its band around its 10-year yield target to 0.5% up and down, from 0.25% previously..
- The Bank of Japan will raise its monthly purchases of government bonds to 9 trillion yen, from 7.3 trillion yen, under a new quarterly bond-buying plan..
- Bond market volatility deteriorated, necessitating the intervention of the Bank of Japan.
- If the current market conditions persist, it will have a negative impact on financial conditions such as corporate bond issuance.
- The steps outlined today will facilitate the transmission of the monetary easing effect produced under the Bank of Japan’s yield curve control programme.
- The Bank of Japan will make additional purchases of Japanese government bonds on December 22nd.
- Each accrual will be intelligently responded by increasing the quantity of purchases further and making purchases at a flat rate when necessary.
- In fixed rate JGB purchases, the highest yielding bond among three spot issues will be purchased at a fixed rate of 0.50.%
- The Bank of Japan will set a fixed rate to be applied to auctions of 10-year Japanese government bonds at 0.50.
- The Bank of Japan has set a maximum amount of direct purchases of corporate bonds for a single company at 200 billion yen and 30% of the total amount owed..
