Bank of Japan’s June Policy Decisions

June 18, 2021

The Bank of Japan left its short-term interest rate and 10-year JGB yield targets unchanged at -0.1% and “around zero percent,” respectively. Ceilings on purchases of ETFs, REITs, commercial paper and corporate bonds were not changed. The special pandemic relief lending facility was extended by a half year to the end of March 2022, and plans for a new facility to promote business investment that counters climate changed were unveiled. On the nine-person policy board, Mr. Kataoka again dissented as he routinely does because he prefers augmented monetary stimulus further, and Ms. Masai abstained from casting her votes. The characterization of economic conditions and likely outlook were not modified. The economy is picking up but still in “severe” circumstances; inflation could stay negative in the short run and will rise toward the eventual 2% goal only gradually. There is a big concern that rising Covid infections in emerging economies could spread to advanced economies. Governor Kuroda reaffirmed that monetary stimulus could be augmented if needed.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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