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BOJ Holds Policy Steady, Adopts Loan Scheme for Quake-hit Areas

The Bank of Japan held off on expanding monetary stimulus on Thursday.

Published: 28th April 2016 09:16 AM  |   Last Updated: 28th April 2016 09:16 AM   |  A+A-

TOKYO: The Bank of Japan held off on expanding monetary stimulus on Thursday, even as global headwinds, a strong yen and soft consumption threatened to derail a fragile economic recovery.

The central bank maintained its pledge to increase base money, or cash and deposits in circulation, at an annual pace of 80 trillion yen ($730 billion). It also left unchanged a 0.1 percent negative interest rate it applies to some of the excess reserves financial institutions park at the BOJ.

The BOJ decided to adopt a 300 billion yen ($2.75 billion)loan-supplying programme aimed at assisting banks operating in areas hit by this month's earthquake in southern Japan.

Its decision to keep the base money target was made by an 8-1 vote, while its decision to maintain the 0.1 percent negative rate was made by a 7-2 vote.

BOJ Governor Haruhiko Kuroda will hold a news conference at 3:30 p.m. (0630 GMT) to explain the policy decision.

The BOJ stunned markets in January by adding a 0.1 percent negative interest rate to its massive asset-buying programme, dubbed "quantitative and qualitative easing" (QQE), in a fresh attempt to accelerate inflation to its 2 percent target.

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