BoJ To Assess Sustainability Of Monetary Easing Policy
The Bank of Japan said it is set to assess the sustainability of monetary easing policy as consumer prices are expected to remain under downward pressure for a prolonged period due to the Covid-19 impact.
As economic activity and prices have remained under prolonged downward pressure, there is a need to support the economy and thereby achieve the price stability target of 2 percent, the bank said.
The bank viewed that there is no need to change the framework of “QQE with Yield Curve Control”. The bank is set to announce its findings at the March 2021 meeting.
The announcement came after the official data showed that core consumer prices fell 0.9 percent in November, which was the fastest in more than a decade.
It is possible that today’s meeting marks the beginning of the end of the Bank’s negative interest rate policy, Marcel Thieliant, an economist at Capital Economics, said.
The Policy Board of the BoJ governed by Haruhiko Kuroda decided to extend the timeframe for emergency loan facility by six months to September 2021.
The bank also removed upper limit of JPY 100 billion on funds provided to eligible counterparty against loans that financial institutions make on their own.
The board voted 8-1 to retain the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.
The bank will continue to purchase necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around zero percent.
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