BOJ stands pat in July, downgrades FY 2021/22 growth outlook
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 released the outline of its scheme to boost funding for activities aimed at combating climate change.
Statement summary
BOJ made decision on yield curve control by 8-1 vote.
BOJ board member Kataoka dissented on yield curve control decision.
Won't hesitate to take additional easing steps if necessary.
To offer funds at zero interest to banks that tap scheme to combat climate change.
It will not offer interest reward to banks that tap its scheme to combat climate change.
Will offer 1-year loans to banks under its climate change scheme.
Will allow banks to roll over loans under climate scheme without any limit to number of times.
Will begin extending loans under climate scheme this year.
Will conduct climate scheme until fiscal 2030.
Will extend loans under climate scheme in yen.
Green loans, green bonds, sustainability-linked loans and bonds likely to be applicable for climate scheme.
Will likely include transition finance as eligible loans for climate change scheme.
Read: BOJ Quarterly Outlook Report: Japan's economy remains in severe state but picking up as a trend
Market reaction
With the initial market reaction, USD/JPY was little changed, holding its range around 110.00.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
