dpa/GNA – The Bank of Japan decided on Friday to maintain its ultra-loose monetary policy to prop up the pandemic-hit economy and combat deflation, while reviewing its monetary policy amid prolonged easing.
In its policy review, the central bank dropped its pledge to purchase exchange-traded funds at an annual rate of 6 trillion yen (55 billion dollars) while keeping an upper limit of 12 trillion yen.
The bank also said the range of 10-year government bond yield fluctuation would be “between around plus and minus 0.25 per cent” from the target level in order to conduct yield curve control flexibly.
“Japan’s economy has picked up as a trend, although it has remained in a severe situation due to the impact of the novel coronavirus at home and abroad,” the bank said in a statement.
In the October-to-December quarter, the Japanese economy grew at an annualized rate of 11.7 per cent for the second quarter of expansion.
However, analysts expect the economic recovery is unlikely to continue as Tokyo and its surrounding areas have been under a coronavirus state of emergency for two and a half months. The measure will end on Sunday.
Six other prefectures had been under the state of emergency for two months until early March.
In the second quarter of 2020, as the pandemic and the tax increase from late 2019 hit, Japan’s economy shrank by a record annualized 29.3 per cent for the third straight quarterly contraction.
