BOJ buys $6B from Finance Ministry, an 'extremely extraordinary' response to covid pandemic
|The Japanese Finance Ministry’s response to the Bank of Japan’s (BOJ) dollar funding on Wednesday was an 'extremely extraordinary' response under the coronavirus pandemic, a Ministry official said in the last minutes.
The BOJ will buy USD6 billion from the Ministry of Finance any time through to the end of March next year at the prevailing market exchange rate at the time, the central bank said in a statement early Wednesday.
This will be the first time that the BOJ will buy dollars from a government account.
The move is "in preparation for smoother execution of the Bank of Japan's operations, such as international financial cooperation and foreign currency supply to financial institutions," the BOJ said in its statement.
The BOJ's announcement comes ahead of its two-day monetary policy review that concludes on Friday.
Market reaction
Despite the BOJ move, the yen stands resilient so far this Wednesday, with USD/JPY keeping the downside bias intact around 103.60.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.