Business & Economy

Bank of Japan maintains monetary easing, economic stimulus plan

Tokyo, Sep 17 (efe-epa).- The Bank of Japan (BoJ) on Thursday maintained its broad monetary easing program as well as the numerous measures applied to mitigate the impact of the COVID-19 pandemic in the private sector.

The decision was made by the monetary policy board of the central bank at the end of its two-day meeting, in which the entity reiterated its objective of reaching a year-on-year inflation of 2 percent, a goal that remains out of reach.

The board decided by eight votes to one to continue with the general lines of its easing strategy, including setting the short-term policy interest rate at -0.1 percent and keeping the long-term government bond yields at about 0 percent.

Added to this is a zero-cost credit program for firms totaling 110 trillion yen ($1 trillion) and an initiative to buy exchange-traded funds and other investment assets, measures adopted in recent months to shore up liquidity in companies and financial markets.

The bank said the Japanese economy “has started to pick up with economic activity resuming gradually, although it has remained in a severe situation due to the impact of the novel coronavirus (COVID-19) at home and abroad,” according to a statement by the bank.

The meeting concluded the day after the formal appointment of Yoshihide Suga as the country’s new prime minister, replacing Shinzo Abe, who resigned for health reasons after nearly eight years in office.

Suga, who was Abe’s right-hand man and chief of staff, has stated his intention to continue his predecessor’s economic strategy, a combination of structural reforms, public spending and monetary easing known as “Abenomics” and launched in close cooperation with the bank.

In addition, he has indicated that among his top priorities is the aim to revitalize the Japanese economy after the damage caused by the virus, and has been willing to take on more stimulus measures if necessary.

The Japanese central bank expects the economy to contract by 4.7 percent in the current fiscal year, which began in April and will conclude at the end of March 2021.

It estimates that in this period the consumer price index will drop by 0.5 percent compared to the previous year due to the contraction in demand caused by the pandemic, far from the target set by the bank. EFE-EPA

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