What Additional Measures Could the BOJ Unveil to Support Japan’s Economy? - Forex News by FX Leaders
What Additional Measures Could the BOJ Unveil to Support Japan's Economy?

What Additional Measures Could the BOJ Unveil to Support Japan’s Economy?

Posted Wednesday, April 22, 2020 by
Arslan Butt • 1 min read

Amid rising worries about an economic recession in the wake of the coronavirus pandemic, the Bank of Japan is expected to roll out more financial support for affected companies in a bid to boost domestic consumption and prop up the economy. With interest rates already in negative, unlike several other central banks, the BOJ has limited tools in its arsenal to provide stimulus.

According to a recent Reuters report, the BOJ could unveil measures to ease corporate funding strains through purchase of corporate bonds and commercial paper (CP). The central bank could roll out these initiatives as soon as next week during its rate review meeting.

A source confirmed to Reuters the challenge the central bank faces in boosting the economy even as the government struggles to contain the spread of the virus, “There’s no doubt the economy is in a pretty bad shape. But taking steps to boost demand now would stimulate consumption and risk spreading the virus.”

More radical measures, including steps to prevent bankruptcies and protect jobs in the economy could be unveiled towards the second half of the year, depending on how the pandemic progresses. So far, the BOJ has committed to spend around $18.56 billion towards increasing corporate bonds and CP purchases.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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