Bank of Japan expands easing measures

Monitoring Desk

TOKYO: The Bank of Japan on Monday ramped up its emergency monetary easing and cut growth forecasts for the world’s third largest economy, as the coronavirus pandemic ravages the globe.

After a meeting shortened from two days to one, the central bank said it would shift to unlimited government bond buying and more than double its capacity to purchase corporate bonds and commercial papers — a move to support Japan Inc’s financing as the country grapples with fallout from the virus.

The announcement comes as central banks around the world revert to extraordinary measures — in hand with trillions of dollars of government stimulus — to support their economies, which have been ravaged by long-running lockdowns aimed at preventing the spread of the disease.

Analysts said the announcement was appropriate but were gloomy on the prospects of success.

The move is “largely symbolic, but it’s better than doing nothing”, Taro Saito, senior economist at NLI Research Institute, told AFP ahead of the decision.

“Given the circumstances, no one expects the latest policy can turn the economy around, and the same can be said about fiscal stimulus,” he said.

Even before lifting the 80 trillion yen cap on government bond buying, the BoJ’s purchases were well below the ceiling, Saito noted.

In a quarterly economic report issued on Monday, the bank also revised down growth forecasts, projecting the economy will shrink 3.0 to 5.0 percent for the current fiscal year to March 2021, compared with the previous estimate of 0.8-1.1 percent growth. (AFP/APP)