Breaking: BOJ eases policy further, boosts purchases of corporate bond, commercial paper, USD/JPY drops


At its shortened one-day virtual monetary policy meeting, the Bank of Japan (BOJ) board members decided to keep rates unchanged at -10bps while maintaining 10yr JGB yield target at 0.00%.

The BOJ eased policy further, said it will increase the purchases of a corporate bond, and commercial paper. The central bank also pledged to buy an unlimited amount of JGBs, removes pledge to buy JGBs so its holdings increase at an annual pace of around 80 trln yen.

Additional headlines

Expands loan programme to combat coronavirus.

To buy up to 20 trln yen of corporate bonds.

To relax rules for its corporate bond, commercial paper purchases.

To extend duration of corporate bonds it buys to 5 years.

Will actively buy JGBs, short-term securities to keep yield curve stably low.

To expand type of assets it accepts as collateral for its loan programme aimed at combating coronavirus.

Will include state-affiliated financial institutions as eligible entity for loan programme aimed at combating coronavirus.

 Will mull new fund supply means for financial institutions.

Will increase maximum amount of commercial paper and corporate bonds it buys per single issuer to 500 bln yen, 300 bln yen, respectively.

Will apply 0.1% interest to outstanding balance of current accounts held by financial institutions at BOJ for those tapping its loan scheme.

The central bank increased the annual pace of ETF purchases to ¥12 trillion (previously ¥6 trillion) and introduced a new lending programme to smooth funding for firms at its March 16 emergency meeting.

About BOJ Interest Rate Decision

BoJ Interest Rate Decision is announced by the Bank of Japan. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the JPY. Likewise, if the BoJ has a dovish view on the Japanese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.

FX implications 

USD/JPY is testing lows near 107.40,as the yen popped up on the policy announcement. 

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.

Feed news

Take advantage of market volatility with our daily Forex, Crypto and Indices Trade Ideas!

Become Premium!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Bulls target 100-DMA again ahead of Eurozone PMIs

EUR/USD is back on the bid above 1.2000, snapping three straight days of sluggishness. The US dollar has resumed its downtrend, helping the spot to make another attempt towards 1.2050. Eurozone/US PMIs awaited after a non-event ECB.

EUR/USD News

GBP/USD: Looks to UK Retail Sales, PMI to regain 1.3900

GBP/USD stays mildly bid above 1.3850, as the US dollar retreats across the board. Covid vaccine updates and upbeat UK data outweigh renewed Brexit jitters. Focus shifts to the UK Retail Sales and PMIs.

GBP/USD News

Bitcoin price falls below $50K as investors rush to exit crypto markets on Biden's tax proposal

Bitcoin price crashed below $50,000 after an announcement revealed that US President Joe Biden could increase capital gains taxes for the rich. The leading cryptocurrency fell in tandem with the US stock market as fears of a potential tax hike loom.

Read more

Gold remains two steps away from $1800 and beyond

Gold (XAU/USD) is attempting a tepid bounce after falling 1% on Thursday amid a sharp recovery staged by the US dollar. Risk-aversion gripped the markets on Bloomberg report that the Biden administration is proposing higher taxes on the wealthy to pay for its social plan.

Gold News

Lagarde cautiousness & Biden's taxes

All market chatter is about Biden's taxes & their impact on shares and cryptos. But let's discuss that ECB decision first-- The economic outlook is improving in Europe, yet you wouldn't know it from Lagarde's Thursday comments after the ECB decision.

Read more

Forex MAJORS

Cryptocurrencies

Signatures