Japan's central bank will hold an unscheduled monetary policy meeting on Friday, May 22, "on possible new measures to provide funds to financial institutions."
The Bank of Japan (BOJ) said in a statement the chairman of the policy board had called the meeting to discuss "monetary control matters" based on a staff report that was compiled following a request by Chairman Haruhiko Kuroda at the April 27 policy meeting.
BOJ's next meeting on monetary policy was scheduled for June 15 and 16.
Separately, Japan's Economy Minister Yasutoshi Nishimura told a news conference in Tokyo today that Japan was ready to deploy all available fiscal and monetary means to protect jobs and businesses from the widening fallout from the coronavirus pandemic, according to Reuters.
He was also quoted saying it would not be good if Japan were to slip back into deflation just because there was too much concern over fiscal health.
Japan officially fell into recession in the first quarter of this year as its gross domestic product shrank 0.9 percent following a fall of 1.9 percent in the fourth quarter of 2019, the country's first recession since late 2014.
On an annual basis, GDP shrank 2.0 percent in the first quarter after shrinking 0.7 percent in the previous quarter.
Inflation was steady at 0.4 percent in March and February.
At its April policy meeting, the BOJ slashed its forecast for growth and inflation, and boosted its asset purchases, also known as quantitative easing.
BOJ forecast the economy would shrink between 0.4 percent and 0.1 percent in the 2019 fiscal year, which ended on March 30, down from its January forecast of growth of 0.8 to 0.9 percent.
For fiscal 2020, which began on April 1, BOJ forecast the economy would shrink a further 5.0 to 3.0 percent before expanding between 2.8 and 3.9 percent in fiscal 2021.
BOJ forecast consumer prices would decline 0.7 to 0.3 percent in the current fiscal 2020 before rising to 0.0 to 0.7 percent in fiscal 2021, well below its 2.0 percent target.
In its April policy statement, BOJ said it would not hesitate to take additional easing measures if necessary and expects short- and long-term interest rates to remain at their present or lower levels.
BOJ also boosted it purchases of commercial paper and corporate bonds to 7.5 trillion yen for each asset class from an earlier limit of 1 trillion, and boosted the purchases of exchange-traded funds (ETFs) and real estate trusts (J-Reits) to 12 trillion and 180 billion, respectively, from an earlier limit of 6 trillion and 90 billion.
BOJ also said it would be buying Japanese government bonds, or JGBs without an upper limit so the 10-year yields remain around zero percent.
Previously, BOJ had a target of buying some 80 trillion yen of government bonds annually but it has also used a combination of negative interest rates - 0.10 percent on banks' excess reserves - and so-called "yield curve control" since September 2016 to ensure bond yields remain low.
www.CentralBankNews.info
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