Boj To Take Emergency Easing Measures
Policymakers at the Bank of Japan have announced measures to ease the impact of the coronavirus pandemic on the economy.
The BOJ met on Monday, two days ahead of schedule. The central bank will increase its purchases of exchange-traded funds from the current 6 trillion yen to 12 trillion yen a year, and it will double its acquisition of real estate investment funds to 180 billion yen per year.
The BOJ will also increase purchases of commercial paper and corporate bonds by one trillion yen each to increase cash flow to businesses.
Policymakers will also introduce a new lending scheme. The BOJ will offer interest-free loans to commercial financial institutions.
The bank hopes this will encourage them to loan more to businesses with shrinking sales.
The BOJ acknowledged that Japan's economic activity has been weak mainly due to the impact of the outbreak. The pandemic has shaken financial markets and made the outlook for the global economy uncertain.
BOJ Governor Haruhiko Kuroda said, "The measures we've decided today will prop up economic and financial activities. Our decision is in line with steps taken by Japan and the governments and central banks of other countries in response to the virus."
The Nikkei Index briefly jumped over 300 points from Friday's finish right after the BOJ announcement. But it soon plunged on concerns about an economic downturn despite the BOJ's move. The benchmark ended lower by more than 400 points to just over 17,000.
