MNI BRIEF: BOJ Extends Some Covid Measures With Policy On Hold

The Bank of Japan board decided to maintain yield curve control policy and left its short-term policy interest rate at -0.1% and the long-term interest rate target at around zero percent, according to the policy statement released on Friday.

The BOJ will complete fund-provisioning against private debt pledged as collateral, which consists of debt issued by large firms and housing loans, at the end of March 2022 as scheduled. But the bank decided to extend the special fund-providing measures, which are set to expire March 2022, to the end of September, as corporate financing by smaller firms remains under stress, see: MNI STATE OF PLAY: Pandemic Measures In Focus For BOJ Meeting.

The BOJ also decided to scale down its purchases of commercial paper and corporate bonds from the upper end of JPY20 trillion to the previous levels, such as about JPY2 trillion for CP and JPY3 trillion for corporate bonds, in or after April.

“The BOJ will closely monitor the impact of the novel Covid-19 and will not hesitate to take additional easing measures if necessary, and also it expects short- and long-term policy interest rates to remain at their present or lower levels,” the BOJ said in forward guidance for the policy rates.