BOJ keeps monetary policy steady in June, extends pandemic-relief programme


The Bank of Japan (BOJ) kept its monetary policy settings unchanged following the conclusion of its two-day monetary policy review meeting on Friday.

The central bank kept the benchmark policy rate on hold at -10bps while maintaining its pledge to buy J-REITS at an annual pace of up to JPY180 bln.

The BOJ, as widely expected, extended a deadline for its pandemic-relief programme beyond September by six months, in a continued effort to stimulate the fragile economy and tepid inflation.

Statement summary

“Japan's economy remains in a severe state but picking up as a trend.”

“Japan's economy likely to recover although activity remains low compared with pre-pandemic levels.”

“Exports, output increasing steadily.”

“Revises down an assessment on consumption.”

“Consumption stagnating.”

“Decision on extending pandemic-relief programme made by 8-1 vote.”

“Climate change has a very large impact on the economy, price, financial developments in medium- to long-term.”

“Will introduce a new scheme to back-finance climate change loans, investment.”

“Will release outline of new climate change scheme at July policy meeting.”

“Amendment to "principal terms and conditions of the special funds-supplying operations to facilitate financing in response to the novel coronavirus (COVID-19)."

“Seven board members voted for BOJ’s decision on yield curve control, one abstained, one opposed.”

“8 board members voted for asset-buying policy, one abstained.”

“Board member Masai abstained from voting on pandemic loan programme extension.”

“Board member Masai also abstained from approving BOJ’s statement on policy decision

“Board member Kataoka voted against yield curve control decision.”

“Board member Masai abstained from voting on yield curve control.”

“Kataoka opposed forward guidance on policy interest rates.”

Market reaction 

With the initial market reaction, USD/JPY was little change, holding its range around 110.20.

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