BOJ to boost funding for companies, avoid cutting interest rates – Reuters

Citing sources with the Bank of Japan’s (BOJ) thinking, Reuters reports that the Japanese central bank will take further steps to boost the funding support for the companies hit by the coronavirus pandemic when its meets at its policy review meeting next Tuesday.

Key quotes

BOJ will boost purchases of corporate bonds and commercial paper (CP).

More radical monetary easing steps to spur demand - such as interest rate cuts - are off the table as they could hamper government efforts to keep households home and businesses shut.

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.

Debate on how to reflate the economy only kicks off when there’s more clarity on when the virus will be contained.

Any steps the BOJ decides next week will be an extension of measures taken last month.

Earlier today, the Nikkei Asian Review reported that the BOJ is considering further downgrading its economic and price projections next week.

USD/JPY implications

Amid oil slump induced risk-aversion, the yen recovers some ground across the board, with USD/JPY now holding the lower ground near 107.60, down 0.13% on the day.