Bank of Japan expands easing measures, cuts growth forecast
27 April, 2020
The Bank of Japan on Monday (Apr 26) ramped up its emergency monetary easing, lifting the cap on its buying of government bonds and increasing purchases of other assets, while cutting its growth forecasts.
After a meeting shortened from two days to one, the central bank said it could shift to unlimited government bond-buying and more than double its capacity to get corporate bonds and commercial papers - a proceed to support Japan Inc's financing as the united states grapples with the spread of coronavirus.
The move is "largely symbolic, but it's much better than doing nothing", Taro Saito, senior economist at NLI Research Institute, told AFP prior to the decision.
"Given the circumstances, nobody expects the latest policy can turn the economy around, and the same could 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 financial report issued on Monday, the lender also revised down growth forecasts for the world's third-largest economy.
For the existing fiscal year to March 2021, it now forecasts the economy will shrink by 0.3 % to 5.0 per cent, compared with the prior estimate of 0.8-1.1 per cent growth.
For the past year to last month, the BoJ estimates the economy shrank 0.1 % to 0.4 per cent, weighed against the previously estimated 0.8-0.9 % growth.
However, it revised up the forecast for fiscal year to March 2022, now estimating growth of 2.8-3.9 per cent, against a previous estimate of just one 1.0-1.3 % expansion.
Source: www.channelnewsasia.com