Daily Management Review

Bank of Japan keeps negative rate unchanged


The Bank of Japan kept the interest rate at a negative level, minus 0.1%, the financial regulator said in an April meeting.

Eight members of the regulator were in favor of maintaining a negative interest rate, one was against. The Japanese Central Bank introduced a negative interest rate of minus 0.1% in January 2016.

The bank also maintained an annual buyback of ETFs at around 12 trillion yen and assets of real estate investment trusts (J-REIT) at around 180 billion yen.

The repurchase volumes of commercial papers (CP) and corporate bonds were kept at 2 trillion yen and 3 trillion yen per year, respectively. At the same time, if necessary, the regulator will additionally redeem these papers. Additional buybacks increased to 7.5 trillion yen for each asset. Thus, the total repurchase volume (including additional) can reach 20 trillion yen. Additional buybacks are planned to be carried out before the end of September 2020.

In addition, the central bank announced its intention to buy an unlimited number of government bonds. Previously, their repurchase was limited to 80 trillion yen.

At the same time, the Central Bank confirmed the decision to continue targeting the yield on 10-year government bonds at a level close to 0%.

The Central Bank of Japan explains the decisions made by the situation in the global economy in connection with the coronavirus pandemic. The regulator will continue to monitor the situation and, if necessary, will take additional measures.

source: asia.nikkei.com