MNI REVIEW: BOJ Policy Unchanged; Maintains Forward Guidance

--BOJ won't hesitate to take additional easing measures if needed

--BOJ voted 8-1 to keep policy unchanged

     TOKYO (MNI) - The Bank of Japan left monetary policy unchanged Wednesday,

taking time to assess the impact of its lending facility on the pandemic-hit

economy, although stressing it remains ready to take further action if needed.

     Policymakers also left the forward guidance for policy rates, indicating a

continued vigilance against the impact of prolonged coronavirus on economy and

financial markets, although the BOJ still expects a recovery through the second

half of the year.

     "For the time being, the BOJ will closely monitor the impact of Covid-19

and will not hesitate take additional easing measures if necessary, and also it

expects short- and long-term interest rates to remain at their present or lower

levels."

     --POLICY ACTIONS

     On the monetary policy, the board decided voted 8-1 to stand pat on the

yield curve control policy and asset purchases, maintaining its recovery

scenario helped by pent-up demand, accommodative financial conditions, and the

government's economic stimulus. Under the framework, adopted in September 2016,

the BOJ will keep overnight rate target at -0.1%.

     The BOJ will continue buying JGBs as needed to stabilize the 10-year yield

"around zero percent", but it will also allow the long-term yields to "move

upward and downward to some extend mainly depending on developments in economic

activity and prices."

     The BOJ also left the scale of its purchases of ETFs (exchange-traded

funds) and J-REITs (Japan real estate investment trusts) unchanged at about

JPY12 trillion and about JPY180 billion, respectively.

     --DISSENT

     --Goushi Kataoka, a former private-sector economist, dissented, considering

that it was desirable to strengthen monetary easing by lowering both short- and

long-term interest rates, in response to a possible increase in downward

pressure on prices and with the aim of alleviating firms' and households'

interest burden.

     He also dissented on the forward guidance, saying, further coordination of

fiscal and monetary policy was necessary, judging from Covid-19's impact, adding

it was appropriate for the BOJ to revise the forward guidance for the policy

rates tying it to the price stability target.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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