MNI BRIEF: BOJ Commits To Market Neutrality On Climate Change

The Bank of Japan stressed that it would observe market neutrality after it outlined new measures on Friday to address climate change, an issue that it said could have a big impact on economic activity and prices as well as financial conditions.

"Supporting the private sector's efforts on climate change from a central bank standpoint will contribute to stabilizing the macroeconomy in the long run. In taking actions from the monetary policy side, the Bank deems it appropriate to give consideration to market neutrality, avoiding direct involvement in micro-level resource allocation as much as possible," the BOJ said.

It added, "From these perspectives, the BOJ decided to introduce a new fund-provisioning measure so that financial institutions that disclose a certain level of information on their efforts to address climate change can receive funds from the Bank against their investment or loans made as part of such efforts. It will launch the measure likely within 2021."