At its emergency one-day monetary policy meeting, the Bank of Japan (BOJ) board members decided to keep rates unchanged at -10bps while maintaining a10-yr JGB yield target at 0.00%.
The BOJ vote was 8 to 1, leaving its pledge to buy JGBs unchanged so that its holdings increase at an annual pace of around 80 trln yen.
The decision on maintaining its interest rate targets was made by a 7-2 vote with board members Goushi Kataoka and Yutaka Harada dissenting.
The central bank, however, increased the annual pace of ETF purchases to ¥12 trillion (previously ¥6 trillion) and introduced a new lending programme to smooth funding for firms.
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.
In a knee-jerk reaction to the BOJ monetary policy decision, the USD/JPY pair dropped to 106.50 levels before quickly reversing to 107.00.
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