The Bank Of Japan Kept The Interest Rate At A Negative Level, Minus 0.1%
The Bank of Japan again kept the interest rate at a negative level-minus 0.1%, the regulator said in a statement following the September meeting.
Eight members of the regulator were in favor of maintaining a negative interest rate, and one was against it. The Japanese Central Bank introduced a negative interest rate of minus 0.1% in January 2016.
Also, the regulator plans to buy an unlimited number of government bonds and continue to target the yield of 10-year government bonds at a level close to 0%. "At the same time, the yield may increase or decrease to some extent, mainly depending on the dynamics of economic activity and prices," the regulator notes.
The Japanese Central Bank also kept the annual volume of repurchases of securities of exchange-traded investment funds (ETFs) at about 12 trillion yen and assets of real estate investment trusts (J-REITs) at about 180 billion yen. The volume of repurchases of commercial securities (CP) and corporate bonds is maintained at 2 trillion yen and 3 trillion yen per year, respectively.
"Japan's economy has started to recover thanks to a gradual resumption of economic activity, although it remains in a difficult situation due to the impact of the new coronavirus (COVID-19) at home and abroad," the regulator said. At the same time, the Central Bank notes high uncertainty about the consequences of COVID-19 and the extent of its impact on the country's economy.
The Central Bank will continue to monitor the situation and take additional measures if necessary. The regulator expects that short - and long-term interest rates will remain at the current or lower level.
The short-term policy interest rate: The Bank will apply a negative interest rate of minus 0.1 percent to the Policy-Rate Balances in current accounts held by financial institutions at the Bank.